Perspective: Morning Commentary for November 30

By: Arlan Suderman, Chief Commodities Economist

Wed, 30 Nov 2022, 14:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 30 – A plethora of economic data is scheduled for release today, as traders close out the month of November. Stocks were cautiously firmer early this morning as traders brace for the data release. The VIX is trading near 22, while the dollar index fell lower to trade near 106.5. Yields on 10-year Treasuries are trading near 3.76%, while yields on 2-year Treasuries are trading near 4.53%. Crude oil prices traded nearly 4% higher amid general positive money flow into the broader commodity sector, with the grain and oilseed markets mostly higher as well.

The private sector created 127K jobs in November, according to this morning’s ADP employment report. That’s down from 239K the previous month, and well-below analyst expectations of 200K jobs created. Today’s data raises concerns ahead of Friday’s monthly jobs report from the government, where expectations are that it will show that the economy created 200K jobs and that the unemployment rate remained unchanged at 3.7% in November. Stock futures pulled back on this morning’s ADP data, fearing that it indicates that the economy is slowing. However, this is the very type of slowdown in the jobs sector that the Federal Reserve needs to see in its quest to cool wage inflation. It cannot tame overall inflation without taming wage inflation, and it can’t tame wage inflation without either increasing the supply of workers or raising the unemployment rate. It doesn’t have much authority to change the supply of workers, so it is focused on the latter. A key indicator in this process will be the JOLTS report of job openings to be released later this morning.

Gross domestic product increased at an annualized rate of 2.9% in the third quarter, according to today’s second reading of the data. That’s up from the 2.6% growth originally reported, and above the 2.7% growth pace projected by analysts. Personal consumption expenditures increased at an annualized rate of 1.7% in the third quarter, up from the 1.4% originally reported and above analyst expectations of 1.5%. This suggests that the economy is more resilient than first believed, making an argument for a more hawkish approach by the Federal Reserve as it considers potential changes in its monetary policy needed for taming inflation. Retail inventories fell 0.2% in October, while wholesale inventories increased by 0.8%. There can be many reasons for this, but the combination of the data would suggest that retailers are slow to restock, fearing an economic slowdown that would leave them stuck with inventory.

China’s stock market failed to maintain the upward momentum of the previous two sessions today that had been built on rising optimism that the government was considering opening up its economy. That lost momentum seems tied to a lack of consistent policy within China. Some cities are loosening Covid restrictions, while others seem to be tightening them. Guangzhou is relaxing restrictions, while things remain tight in Shanghai, where authorities shut down the Disney Park. Further relaxation of the national Covid policy will likely hinge on how things work in Guangzhou, where Covid-related protests Tuesday night appear to be encouraging more relaxation in policy.

China dispatched a working group of oilseed experts to discuss a potential problem with the country’s rapeseed crop. Much of China’s rapeseed is grown in the middle and lower portions of the Yangtze River Valley, which suffered significant drought stress into the fall planting season. Planting was delayed beyond the desired window in many areas, although improvement in moisture in November facilitated some late planting. Nonetheless, the crop is poorly developed heading into the winter, leaving its vulnerable to any harsh cold that it may encounter. China is the third largest producer of rapeseed in the world, while also being the second largest consumer. A short rapeseed crop could increase demand for other oilseeds. China drew down its reserve supplies of soybeans this year to avoid paying the United States high prices after Brazil had a short crop.

The U.S. House of Representatives is scheduled to vote today to block a strike by rail unions on December 9. The House is expected to put the brokered labor agreement from September into law, requiring both sides to abide by it. This is largely how the nation avoided a prolonged strike in 1992. The bill, if passed by Congress and signed by the president, would avoid a rail strike, keeping commodities flowing, but at a higher price. The five-year contract would retroactively implement a 24% pay raise over the life of the agreement – backdated three years. In other words, the two sides will soon be starting negotiation on the next contract. On another note, Argentine farmers sold a two-month high 299K metric tons of soybeans Monday under the “pesos for soybeans” program that started that day.

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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.

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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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