Perspective: Morning Commentary for October 20

By: Arlan Suderman, Chief Commodities Economist

Thu, 20 Oct 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

Perspective Morning Commentary will not be published on Friday, October 21.

October 20 – Stock futures had a positive bias to them overnight, ahead of this morning's weekly jobless claims data. However, they pulled back from overnight levels when the UK's Prime Minister Liz Truss stepped in front of the microphones to resign her position. It should be noted that the VIX continues its string of days above “30,” indicating that nerves are still very elevated on Wall Street as Treasury yields trend higher. That elevated fear level leaves the markets vulnerable as we inch closer to the Fed's next policy meeting at the beginning of November. Geopolitical risks are elevated as well, with fighting intensifying in Ukraine, while tensions with China are also rising as well. The dollar index is trading near 112.6 this morning. Yields on 10-year Treasuries are trading near 4.15% at this hour, after setting a fresh 14-year high of 4.18% earlier in the session. Yields on 2-year Treasuries are trading at 4.59%, after setting a fresh 15-year high earlier in the session of 4.61%. Crude oil prices are nearly 2% higher this morning on rumors that China will shorten its quarantine requirements for visitors that could speed up its recovery, which is also helping to give the grain and oilseed markets a lift as well.

First-time claims for unemployment benefits totaled 214K in the week ending October 15, down from 226K the previous week and well below analyst expectations that they would rise to 235K. That put the four-week moving average at 212.25K claims, up slightly from 211K the previous week. Continuing claims for the week ending October 8 rose 21K to 1.385 million. This number is still at historically low levels but is starting to trend higher. In fact, we need to see the unemployment rate rise in order to bring job openings more in balance with available workers seeking jobs to bring down wage inflation, which is a key to taming overall inflation. That fact receives very little discussion on Wall Street.

Could BRIC be expanding? Little coverage was provided to a key meeting in China in late June when the leaders of the BRIC nations (Brazil, Russia, India & China) met to draw out a plan for circumventing the Swift banking system and to establish a framework to encourage trading between these countries using the yuan as its central currency. The hope was that this plan would allow China and Russia to support one another with essential food and energy commodities in a world of sanctions from the West, including use of an alternative currency to the dollar. Saudi Arabia, a key member of OPEC, has now also reportedly indicated an interest in joining the BRIC coalition, amid increased tensions with the United States. Saudi Arabia had long aligned itself with the United States, providing it with oil in return for getting security assistance from the United States from its long-term foe Iran. However, the United States is threatening severe sanctions against Saudi Arabia following OPEC’s recent move to cut crude oil output by 2 million barrels per day. Saudi Arabia no longer sees the United States as a dependable friend, and it is considering realigning itself with Russia and China.

One-third of Ukraine’s electricity infrastructure is destroyed following this week’s barrage of air attacks from Russia, with water infrastructure also a target. Ukraine reports that Russia carried out more than 300 air strikes on Ukraine energy facilities since October 10^th. People in Ukraine are being asked to reduce electricity usage, and they are doing so, although some rolling blackouts are still required due to the shortage of power. Russia’s focus on Ukraine’s infrastructure across the country is aimed at killing the spirit of the Ukrainian people ahead of the winter. Otherwise, the focus is on Ukraine troops moving closer to Kherson, the only regional capital that Russian forces captured during this year’s war. Whoever controls Kherson controls the land access to Crimea, which Russia claimed in 2014. The bridge connecting Crimea with Russia has already been taken out by an attack earlier this fall. This fits within Ukraine’s plan of taking back Crimea from Russia, along with the other occupied territories as well. This region of the world had become the breadbasket of the world in recent years, providing food-based commodities to much of the rest of the world. Russia faces increasing difficulty exporting its massive production due to the sanctions, so it’s threatening to block extension of the deal that allows Ukraine to export food-based commodities as well when that agreement expires on November 22^nd.

Positive money flow supported the grain and oilseed markets overnight, based on the above news from China and from the Black Sea Region. Global supplies of corn, soybeans and wheat are snug, with little room for error. Soybeans have the best opportunity to grow themselves out of this tight situation if Brazil can grow a normal crop this year. The season started well, and continues to go well, but the extended models continue to show expanding dryness over at least half of the soybean belt by mid-November. That would be a problem if it verifies. Yet, day-to-day trading of the grain and oilseed markets is currently dominated by Algo computers focused on headlines and technical buy and sell signals, and on momentum trades. Low water levels on the Mississippi River remain a significant problem, with no notable improvement seen over the next several weeks. In fact, the situation may get worse.

Grains & Oilseeds
Base Metals
Precious Metals
Digital Assets
Energy
Dairy
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products
Currencies
Interest Rates

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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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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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