Perspective: Morning Commentary for October 4

By: Arlan Suderman, Chief Commodities Economist

Tue, 04 Oct 2022, 13:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 4 – The rebound continues on Wall Street amid ideas once again that the world has reached peaked monetary tightening policy. That may or may not be reality, but in the world of the markets, perception is reality. For now, Treasury yields are coming down, and equity traders see that as evidence of a shift in central bank monetary policy. What it means is, the recent yields were attractive to risk-adverse investors. The optimism lifted both stock futures and a broad sector of the commodities overnight, with the VIX slipping just below the pivotal 30 level to trade near 29. The dollar index traded notably lower to 111.0 this morning. Yields on 10-year Treasuries are trading near 3.60% this morning, while yields on 2-year Treasuries are trading near 4.06%. Note that the inverse remain large between the two. Crude oil prices are 2% higher, while the grain and oilseeds were mostly higher as well.

Market emotions ebb and flow, and that is certainly the case currently. Once again, market sentiment shifted toward optimism that central banks around the world would take their foot off the brakes of monetary tightening. Several events triggered the shift in sentiment. The United Kingdom reversed its position on tax cuts, U.S. manufacturing data came in weaker suggesting a slowdown in the economy, high European energy prices pulled back, and the Australian central bank posted a smaller rate increase than anticipated. None of this indicates that inflation has been put back into the bottle. We can’t know that with certainty as long as massive amounts of stimulus remain in the system so that consumers can go back to aggressive spending once their fear levels retreat. Yet, global traders don’t think that central bankers have the courage to sustain monetary tightening through adversity – and they may be right. So far, the Federal Reserve has repeatedly surprised traders in 2022 by its tenacity in holding to its commitment to get inflation under control, even in the face of fiscal stimulus working against it. No less than five Fed members will be speaking publicly today, providing them an opportunity to impact market sentiment. Their next formal meeting for shaping policy is still four weeks away. This market is very headline driven these days, so Fed member comments can have a significant impact on market direction – turning on a dime. The ebb and flow continues, and it will likely continue for quite some time.

Ukraine continues to build momentum in southern and eastern parts of the country – retaking territory previously occupied by Russian troops following Russia’s invasion in February. Ukrainian forces reportedly pushed through Russian defenses in the south, while consolidating their hold on territory around Lyman in the northeast and pushing further into neighboring Luhansk. These are part of the regions that President Vladimir Putin declared annexed to Russia on Friday. Ukraine reports that Russian troops are increasingly seeking to escape from the conflict. Russia claims that it has conscripted an additional 200K soldiers to join the fight, but their training was quick, and considered to be inadequate for the intense fighting that they’re facing once they arrive in Ukraine. Meanwhile, farmers in Ukraine continue to plant winter crops for harvest in 2023. Ukraine’s Ministry of Agriculture reports that 1.1 million hectares of winter wheat has been planted, which is 27% of the intended acreage this year. Overall wheat planting is expected to be down roughly another 20% this year due to the difficulties of war. Barley planting progress is at 96K hectares, or 14% of the intended area. Rye planting has occurred on 35K hectares, or 41% of the intended area. Observers report that 265 vessels have hauled grain and other products out of three Ukraine ports through the “grain corridor” set up this summer, containing 5.9 million metric tons of agricultural products. That total included 2.75 mmt of corn and 1.70 mmt of wheat.

StoneX releases the results of its October customer survey of U.S. corn and soybean yields this afternoon after the markets close. This will be the first of several private estimates scheduled for release ahead of next week’s USDA crop report on the 12^th. I have not seen the data, so do not read anything into my comments. I do not know which way the survey data is leaning. I can say that market expectations are starting to prepare for the possibility that USDA will hold the line, or even bump its yield estimates next week, based on anecdotal harvest results being circulated through the Midwest. That could happen. However, I generally see crop ratings rise through harvest when that occurs as those filling out the surveys respond to what they’re hearing locally. Instead, we’re seeing condition index scores continue to trend lower. As a result, my yield model based on those ratings dropped its corn yield to 168.0 bushels per acre this week, with my soybean yield model falling to 51.5 bpa. The yield models tend to not pick up on changes in seed size very well. We know that seed size was a real problem in areas that lacked rain in the west, but seed size was large in areas that received rain. How they balance each other out will shape the U.S. yield.

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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: 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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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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