Perspective: Morning Commentary for November 26

By: Arlan Suderman, Chief Commodities Economist

Fri, 26 Nov 2021, 14:06

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 26 – Fear rises on Wall Street, and around the world, as the unknowns of a new Covid-19 variant in South Africa rattle the global markets. A broad-based sell-off is seen in both the equities and in the commodities this morning in thinner holiday-trading conditions. The VIX spiked above 28 for the first time in two months early today, and it is now near 26. The dollar index dropped to trade near 96.2 this morning. Yields on 10-year Treasuries are trading near 1.53% in heavy trade volume, after falling to a two-week low near 1.50% earlier in the session. Crude oil prices are down by more than 5% on fears of the return of lockdowns globally. The Ags were not open overnight, due to the Thanksgiving break, but they too are expected to be impacted by the fear gripping the markets.

Global authorities expressed alarm today regarding a new Covid-19 variant emerging from South Africa. Very little is known yet about the latest variant, but travel restrictions are already being implemented to restrict its spread. Yet, some experts believe that it has already spread to other countries. The UK Health Security Agency stated that this new variant has a spike protein that is dramatically different to the one in the original Covid-19 virus that current vaccines were developed to stop. That raises fears about how those vaccines will perform. The unknown of this variant creates fear, which is being played out in the markets today.

Data points are few and far between today, making today’s trade more about emotions and marking time until Monday, than it is about digesting headlines. Trade volume is traditionally low today, but that doesn’t mean that we don’t see volatility in one or more of the markets if something does pop up, which it has. Trade volume should pick up again on Monday, although we typically see more of a holiday trading mode until January. That said, it’s not like the “old days” when we relied purely on humans. Computers do almost all of the trading today, which allows trade to sustain higher volumes than what we used to see in the holiday periods.

Consumer sentiment continues to reflect rising apprehension over inflation. The University of Michigan released its consumer sentiment index on Wednesday, showing a declining view of the economy. In fact, sentiment this month is lower than at any other point over the past decade. The headline index slipped to 67.4 in November, down from 71.7 in October and down from 76.9 a year ago when Covid fears were raging. The current conditions index fell to 73.6, down from 77.7 the previous month and down from 87.0 the previous year. The longer-term expectations index fell to 63.5, down from 67.9 in October and down from 70.5 a year ago. The new Covid variant won’t help sentiment.

This month’s survey reflected concerns over both a rapidly escalating inflation story, along with a lack of government response to solve the problem, according to the University of Michigan. One in four consumers noted in the survey that inflation has eroded their living standards this month. In fact, complaints about falling living standards doubled in the survey over the past six months, and they quintupled over the past year. Consumers anticipated declining inflation adjusted incomes, while anticipating spending cutbacks due to rising inflation, which they believed would slow economic growth in the year ahead. Yet, they also noted that they have a strong desire to resume more normal holiday gatherings with family and friends this year, using their accumulated savings to do so, given the higher prices. The concern is then, what happens after the holidays when that spending dries up?

Reports emerged Wednesday that Russian fertilizer plants may shut down. These reports cannot be confirmed yet at this time, but they raise concerns in a world that is already worried about supplies for the 2022 crop year. The reports indicate that the Russian government told fertilizer producers to stop shipments to the ports through at least December 1. That would mean that inventories would quickly fill up storage at the plants, requiring a shutdown. It’s sometimes difficult to restart these plants after they’ve been shut down. Besides that, any shutdowns at all further tighten global supplies. This and other disruptions are not impacting all countries the same. U.S. producers are paying high prices, and there may be spot shortages, but most of our crops will see fertilizer applied. Lessor developed countries would most likely get the short end of the supply, leaving production in those areas most at risk.

Today’s commodity trade will likely be more about risk aversion amid the new Covid variant than actual supply and demand fundamentals. Today’s close will say more than the open. It will be a shortened trading session, so volume will be more compressed, but much of the focus will be about reducing risk exposure.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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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

Grains & Oilseeds

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