Perspective: Morning Commentary for October 13

By: Arlan Suderman, Chief Commodities Economist

Wed, 13 Oct 2021, 13:19

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 13 – Stock futures were relatively quiet overnight, ahead of this morning’s inflation data. The VIX traded mostly between 19 & 20, while the dollar index consolidated near 94.4, or just below one-year highs set on Tuesday. Yields on 10-year Treasuries are trading near 1.58%. Crude oil prices are 1.0% lower, while the Ags were mixed to lower in overnight trade.

The consumer price index rose 0.4% month-on-month in September, up from expectations that it would remain unchanged at 0.3%. The CPI was up 5.4% year-on-year in September, up from analyst expectations that it would remain unchanged from the previous month at 5.3%. The core CPI that excludes the more volatile food and energy sectors was up 0.2% month-on-month in September, matching analyst expectations, but up from 0.1% the previous month. The core CPI was up 4.0% year-on-year in September, matching both the previous month and analyst expectations. More than half of the September increase in the CPI came from increases in prices for food and shelter, with overall food prices up 0.9% month-on-month and food at home up 1.2%. The energy index rose 1.3% month-on-month in September, with gasoline up 1.2%. Increases were also seen for new vehicles, household furnishings and operations, and motor vehicle insurance. Decreases month-on-month in prices were seen for airline fares, apparel and used cars. The energy index was up 24.8% year-on-year in September, while the food index was up 4.6%. The Fed likes to focus on the core CPI that excludes food and energy, but it’s difficult to find a sector that isn’t adversely impacted by rising energy prices. We’ll see data on inflation at the wholesale level tomorrow morning.

The minutes of the September Fed policy meeting are scheduled for release at 2 p.m. EDT today, which will also be three weeks prior to the next meeting in early November. The minutes should give greater clarity to the discussions going on inside the Federal Open Market Committee, and the possible dissent developing between Fed Chair Jerome Powell and some of the growing number of hawkish members within the Fed policy committee. Powell shows every sign that his priority is to be reappointed to his position for another term early next year. He’s held tightly to the Administration’s stance that inflation is transitory, while he has had to back down from some of his previous statements in recent weeks. Powell has remained a strong supporter of an easy-money policy to support the borrowing necessary to finance the Administration’s spending priorities, while refusing to acknowledge the inflationary pressures that policy creates. He now risks becoming the scapegoat for the Administration faced with political headwinds going into the midterm elections created by high inflation concerns. Things will not get any easier as we approach the end of the year, with Congress again faced with the need to keep the government open and the need to raise the debt limit in early December, while still debating two major spending measures that could create an even greater need for asset purchases by the central bank. All of this raises the potential for significant influence on money flow in the broader markets, including the commodity sector.

The power is slowly coming back on for Chinese soybean crushing plants shut down over the past month when coal prices surged to record high levels. The Chinese government made changes this week that allow power plants to pass along some of the high costs of coal, allowing them to produce without losing so much money. It was never a question of production capacity, but rather one of covering costs. Users are also receiving priority designations, with an orderly system of blackouts that are scheduled in advanced. Mining, manufacturing and construction utilize 64% of China’s electricity, according to China Direct from our Shanghai office, with residential use only accounting for 16%. Mining, manufacturing, and construction demand for electricity is up 12.3% year-on-year, while residential demand is up 7%. Soybean crush facilities are slowly coming back online. Keep in mind that much of the soymeal demand continued to be filled by plants still operating through the outages. Few plants were running near capacity prior to the outages, so most of them had room to expand output to make up for plants not operating, making soymeal shortages more regional in nature, requiring higher transportation costs, but not significant shortages.

USDA’s WASDE crop report was bullish for wheat, while increasing supplies of corn and soybeans. Supplies of all three commodities remain vulnerable to supply threats, although no additional threats appear imminent at this time. That puts the immediate focus on the demand side of ledger, with a focus on Chinese purchases and shipments. China bought 12.1 million bushels of soybeans this morning, while unknown bought another 7.3 million bushels. Unknown destinations also bought 6.4 million bushels of corn. Buyers are now buying the recent price break.

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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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