Perspective: Morning Commentary for October 3

By: Arlan Suderman, Chief Commodities Economist

Mon, 03 Oct 2022, 13:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 3 – Stocks again firmed overnight, setting a positive tone to start trading in the new week and the new month. However, firmer stocks has not been a problem in overnight trade lately, but rather sustaining that strength into the day session has been the challenge. This week’s focus looks to be on jobs, with both the ADP private sector report out on Wednesday and the government’s monthly jobs report coming out on Friday. All of this continues to be taking place within a context of expectations that central bank tightening to tame inflation will do notable harm to the economy. China is out on a week-long holiday this week – largely a “stay-at-home” holiday. The VIX is trading near 31 this morning, suggesting ongoing fears on Wall Street, as stocks made new lows for the move overnight before firming into the early morning. The dollar index firmed to trade near 112.3 overnight. Yields on 10-year Treasuries are trading near 3.66%, as more people take advantage of current rates amid the uncertainty of the markets, while yields on 2-year Treasuries trade near 4.10%. Money flow into the broader commodity sector is generally positive this morning, with crude oil prices up 6% in early trade, while the Ags were generally higher as well.

Crude oil prices surged this morning as OPEC+ considers reducing output by more than 1 million barrels per day to support the market. That would be the cartel’s largest cut since the pandemic. Some members of the cartel may make additional cuts, although the truth is, many members are struggling to even come close to their current quotas. In fact, OPEC+ missed its July quota by more than 3 million barrels per day due to production capacity issues. There are two factors currently unknown on the global energy balance sheet. First, which direction will we see China’s demand go in the months ahead? Will it back off its zero-tolerance policy toward Covid after its 20^th Congress meeting in two weeks, or will it double-down on it, resulting in an even slower economy? The second question is, what will become of Russian supplies after the European Union’s ban goes into effect on December 5? Will it find a home for all of that oil, or will Russian production end of needing to be cut as supplies back up? Of course, all of this is within a context of market expectations that the world is heading for an extended recessionary period due to central bank monetary tightening to tame inflation.

Ukrainian troops continue to make gains in recapturing territory previously occupied by Russian troops – the very territory that Russian President Vladimir Putin declared on Friday to be annexed to Russia. Ukraine reports this morning that it has successfully liberated Lyman, a key logistics hub for occupying Russian forces in northeast Ukraine, with more settlements around Kherson in the south also liberated. Russia states that it withdrew forces from Lyman to prevent them from being encircled. It’s also noteworthy that analysts observe that Russian reports of these events have significantly deviated from narratives preferred by the Kremlin that things are generally under control. The Russian installed head of Ukraine’s Kherson region stated on state television that Ukraine’s forces have made breakthroughs in the region and that they have taken control of some settlements. Ukraine is also working closely with Turkey and with the United Nations to seek an extension to the trade agreement to allow grain to flow from three of its southern ports beyond the November deadline of the current agreement, although Russia continues to protest the agreement, raising concerns that it could come to an end. The risk of such continues to concern grain and oilseed traders. The markets remain concerned what Putin might do to change the momentum in Ukraine.

Friday’s USDA quarterly grain stocks and small grains summary reports were full of surprises. USDA slashed its all-wheat production estimate by 133 million bushels, or nearly 7.5% on Friday, further tightening supplies at a time when the future of Ukrainian supplies is in doubt, and at a time when severe drought in the U.S. Plains continues to put next year’s crop in question. The cuts were across the board, with significant reductions seen for hard red winter, soft red winter, durum, and other spring wheat production. Yet, USDA’s September 1 wheat stocks estimate matched the trade estimate to the bushel, suggesting low wheat feeding despite an absence of sufficient supplies of corn in the major feedlot states during the last quarter. USDA also cut last year’s corn production by 41 million bushels, while pegging September 1 corn stocks 135 million bushels below the average trade guess, suggesting larger corn feeding. Last year’s soybean crop was bumped by 30 million bushels, pushing stocks above the average trade guess by a similar amount. In other words, corn and wheat stocks are tightening, while soybean stocks are getting larger. That then sets the table for this week’s round of private U.S. production estimates, led by StoneX’s customer survey numbers tomorrow afternoon. Corn stocks cannot afford to get any tighter without more demand rationing, but traders are less confident now that we will see further cuts.

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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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Perspective: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

Grains & Oilseeds

Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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