Perspective: Morning Commentary for September 21

By: Arlan Suderman, Chief Commodities Economist

Wed, 21 Sept 2022, 13:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 21 – Stock futures bounced overnight ahead of this afternoon’s policy statement release from the Federal Reserve, although nerves remain high on Wall Street. The overnight bounce also came amid escalation in the Ukrainian war. The VIX is trading near 27 this morning, while the dollar index hit a new 20-year high near 110.9. Yields on 10-year Treasuries are trading near 3.55%, after hitting a fresh 11-year high of 3.60% on Tuesday. Yields on 2-year Treasuries are trading near 3.97%, after hitting a fresh 14-year high just shy of 4.0% on Tuesday. Crude oil prices firmed on the new threats from Russia, while the grain and oilseed sector was mixed.

Fed fund futures traders put 82% odds this morning on the Fed raising its benchmark interest rate by 75 basis points this afternoon, followed by another similar hike in six weeks. The stability of this morning’s trading on Wall Street suggests that this is what has been priced in by the market. However, traders will also be anxious to see the Fed’s famous dot plot matrix on which each policymaker plots their expectations of where the rate will be over the next several years. The market has priced in expectations that the rate will peak at 4.5% by the March meeting, before starting to come down again by summer. But the market has repeatedly expected less hawkishness from the Fed than what it has stated that it intended to do, and then what it has done. The question at hand then is, will today’s dot plot matrix readjust the market’s expectations once again, resulting in another big move in one direction or the other in the days and weeks ahead?

Russian President Putin will call up 300K reserve soldiers to provide support for his war with Ukraine, including calling some older officers out of retirement. This comes as he takes steps to annex four oblasts currently occupied by Russian forces. That way he can say that the troops are needed to defend Russian territory from attacks by Ukraine and NATO forces. The Putin Administration also once again threatened to use whatever resources were necessary to protect itself, including its nuclear arsenal. Putin could theoretically mobilize 25 million people for service in his military if he so chose.

The war in Ukraine has not gone well for Putin over the past month, so this is his attempt to turn the tide in his favor once again, suggesting an escalation of the conflict. That raises the risks that the “safe corridor” agreement to allow cargoes of grain to leave Ukraine may be at risk, but it also raises the risks that further trade out of the Black Sea Region could be curtailed, including shipments from Russia, further tightening the availability of critical food commodities in the weeks and months ahead. The escalation suggests that tensions between Russia, Europe and the United States will likely escalate, creating a challenging winter for all those involved. The risk is, tightening global supplies of wheat, corn, oilseeds, fertilizer, crop chemicals, natural gas, crude oil, diesel fuel, and many other products used to feed and fuel the world, and more inflation in the process. This doesn’t automatically mean that we will see deeper shortages of these assets, but it does raise the risk of such in the months ahead.

Ukraine exported 6.878 million metric tons of grains and pulses via land and sea since July 1, as of today, including 2.581 mmt so far this month. That compares to 12.115 mmt during the same period in 2021, including 3.348 mmt in September. This year’s total includes 2.301 mmt of wheat, including 1.044 mmt in the first three weeks of this month, along with 3.953 mmt of corn, of which 1.259 mmt was shipped this month. Ukraine’s exports through its ports are at risk as Russia escalates the war, but it continues to increase its efficiencies in shipping grain over its western border via rail. Nine percent of Ukraine’s winter crops have been planted thus far, versus its intended acreage. It’s 2023 wheat production is expected to fall to 16 – 18 mmt, down from 19.2 mmt in the current year, and down from 33.0 mmt in the previous year.

Wheat prices found continued strength overnight from the escalating risks tied to the Ukrainian war, while corn and soybean prices pulled back modestly. Weather problems in the States suddenly mean a bit more amid the rising risks in the Black Sea once again. Yet, all of this continues to be traded within the context of Wall Street fearing a larger recession that could negatively impact global demand, along with a rising dollar that makes it challenging for U.S. commodities to compete. The headline driven Algos will likely yield a greater influence in the days ahead as Wall Street reassesses the risks coming out of the Black Sea, although grain and oilseed fundamentals will largely be focused on harvest results coming from the Midwest over the next several weeks.

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Perspective: Morning Commentary for August 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

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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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