Perspective: Morning Commentary for May 4

By: Arlan Suderman, Chief Commodities Economist

Wed, 04 May 2022, 13:38

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 4 – Stock futures were flat to firm overnight, as traders brace for today’s statement from the Federal Reserve, which is scheduled for 2 p.m. EDT this afternoon. However, the VIX slipped below 30 overnight to trade near 29, with the dollar index pulling back modestly to 103.2. The combination freed up some positive money flow into the broader commodity sector in overnight trade. Yields on 10-year Treasuries are trading near 3.00%. Crude oil prices are more than 4% higher in early trade, while the Ags are notably higher as well.

The private sector added 247K jobs in April, according to this morning’s ADP report, down from analyst expectations of 398K. The March number was revised to 479K private sector jobs created, up from the 455K originally reported. Today’s data sets the tone for Friday’s government jobs report, which analysts expect to show that 400K non-farm jobs were created in April, down from 431K the previous month. Analysts expect it to also show the unemployment rate staying very tight at 3.6%, with hourly earnings up another 0.4% month-on-month and up 5.5% year-on-year.

The tight employment situation is one of the concerns of the Federal Reserve as it works this morning to put the finishing touches on its revised monetary policy. It has two mandates – maintain inflation near 2% and maximize employment. However, an extremely tight jobs market contributes to wage inflation, which makes it difficult to maintain inflation near the 2% target. It’s difficult to bring inflation under control when wages are rising at 5.5% per year. Higher wages provide more spending power to consumers at a time when demand already exceeds levels that supply lines were designed to support. A shortage of workers adds to those problems, with nearly three jobs available for every unemployed worker looking for a job. However, raising the unemployment number to ease the stress on the jobs market means that the Federal Reserve needs to inflict some pain on the economy. Finding the right dose of medicine to do so is the trick, as the Fed has never faced this type of dynamic before now.

Ukraine made progress toward increasing grain exports in April. Exports during the month are estimated at 1.263 million metric tons of grain and oilseeds, which is roughly one-fifth of pre-war export levels, but more than double what we saw in March. The April total included 832K tons exported by rail, 317K tons exported by sea and 115K tons exported by road. April exports included 768K metric tons of corn, 127K tons of wheat, 25K tons of barley, 2K tons of sorghum, 110K tons of sunflower, 48K tons of soybeans, 11.2K tons of rapeseed, 151.5K tons of sunflower oil, 17.8K tons of soybean oil and 1.2K tons of rapeseed oil. The exports are an essential part of financing the planting of the 2022 crops in Ukraine, which Russia would like to prevent. Russian bombs reportedly completely destroyed a grain elevator in Rubizhne in the eastern Ukraine oblast of Luhansk this week. The destroyed elevator complex was capable of holding 30K metric tons of grain. Ukraine officials report that Russian troops have stolen 400K metric tons of grain thus far from grain storage facilities in Zaporizhzhia, Donetsk, Luhansk, and Kherson oblasts. Other reports indicate that Russian missiles targeted bridges and rail lines used to transport grain.

Many countries previously counting on Ukraine for wheat shipments turned their focus on India in recent weeks, hoping that it could help fill the deficit in the supply. However, that looks a bit less likely after recent reports that India’s wheat production is falling short of expectations. Hot temperatures in March hurt the crop as it was going through the critical grain fill period of development, reducing yields. Bloomberg posted a story this morning that India is considering restricting exports in the year ahead due to the production problems, which refocused the markets on the global shortages, amplifying overnight gains in the grain and oilseed markets.

Money flowed into the broader Ag and Energy sectors overnight as the VIX pulled below 30 and the dollar index eased back, allowing traders to refocus on some of the more bullish fundamentals of these two sectors while also focusing on buying those assets that will help fund managers hedge against inflation. Stock traders on Wall Street are worried that the Fed will do too much to slow the economy, while Ag and Energy traders are worried that the Fed won’t do enough to slow inflation. Both may be right. That’s what stagflation looks like – a stagnant economy with high inflation rates. One of the keys though is to contain fear levels on Wall Street so that fund managers are willing to keep their money in the so-called high-risk assets. Fundamentally, we don’t know what the summer growing season offers, but we do know that plenty of risks remain for these commodities the next several months.

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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