Perspective: Morning Commentary for September 28

By: Arlan Suderman, Chief Commodities Economist

Wed, 28 Sept 2022, 13:41

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 28 – Stocks again attempted a modest bounce overnight, after both the Dow Jones Industrial Average and the S&P 500 Stock Index futures fell to 22-month lows. Stock futures firmed as Treasury yields pulled back after testing major chart objectives. That once again supported positive money flow into both the broader commodity sector, as well as the equities, although traders remain very cautious. The VIX – Wall Street’s Fear Index – rallied to a fresh three-month high near 35 overnight, before pulling back to trade below 34 at this hour. Nonetheless, the VIX remains elevated, reflecting high levels of fear on Wall Street as traders worry about global economic risks amid widespread central bank tightening to control inflation. The dollar index hit a new 20-year high near 114.8 overnight, before pulling back to trade near 114.3 at this hour. Yields on 10-year Treasuries traded to a new 14-year high near 4.02%, although profit taking then pulled yields back to 3.83%, allowing a reprieve for the other markets. Yields on 2-year Treasuries rallied to 4.32%, just below Monday’s 15-year high of 4.36%, before pulling back to trade near 4.15% at this hour. The broader bump in commodities helped hold crude oil prices above this week’s lows, allowing for a short-covering rally as traders monitor the hurricane in the eastern Gulf of Mexico. Corn and wheat prices pushed modestly higher as well this morning, while soybean prices held onto modest losses.

Congress continues to work on a stopgap funding bill that would prevent a government shutdown on Saturday. Senate Majority Leader Check Schumer cut controversial energy legislation from the bill on Tuesday night in hopes that it would allow the stopgap funding measure to move forward in the Upper Chamber. Several more legislative steps are needed to pass the bill, but it appears to now have enough bipartisan support to get approval. The stopgap measure would keep the government funded through December 16^th, setting up another showdown ahead of the Christmas break, but that would also be after the mid-term elections. In addition to funding the government for the next 2-1/2 months, the legislation includes $12.3 billion in new money to assist Ukraine in turning back the Russian invasion, while also authorizing President Biden to utilize $3.7 billion in excess U.S. weapons by transferring them to Ukraine. It also would appropriate $35 million to prepare for and to respond to potential nuclear and radiological incidents in Ukraine. Congress has relied on stopgap funding of the government due to its failure to pass full-year funding budgets by the start of the fiscal year on October 1^st in 43 of the past 46 years.

China’s yuan fell to 7.25 to the dollar today, it’s weakest level in 14 years. The yuan has been tumbling in value over the past six months as China’s economy struggles amid its zero-tolerance Covid policy that continues to keep varying areas of the country in lockdowns and restrictions. Sixty percent of its domestic flights are grounded due to lack of ridership due to the Covid-related restrictions. China’s slowing economy creates a need for central bank stimulus, but that’s difficult to do when the United States and many other western economies are in aggressive monetary tightening mode. A cheaper currency facilitates importing inflation, which China has been trying to avoid. China’s President Xi Jinping was back in the public spotlight today, less than three weeks ahead of the meeting of the 20^th Congress that is expected to re-elect him to another four-year term in office. The Chinese Communist Party holds his zero-Covid policy up as a significant political achievement that protected lives and kept China’s death toll the lowest in the world due to Covid, despite its detrimental impact on the economy. China’s week-long National Day celebration is October 1 to October 7 – a time when people normally travel to be with friends and family. However, this year’s holiday is expected to see most people stay at home due to Covid restrictions. Nonetheless, we did see last week’s soybean crush reach 2.05 million metric tons as processors rushed to build inventories ahead of the holiday, up from 1.8 mmt the previous week, and up from the five-year average for the week of 1.89 mmt. Demand for soymeal is strong, with hog feeding margins topping $120 per head.

Hurricane Ian reached Category 4 strength this morning, and it is close to Category 5 strength, ahead of its anticipated landfall on the west coast of Florida today. Ian is expected to hit central Florida just south of an area of major phosphate fertilizer production. If so, most of the devastation should miss this key production area, although loss of electricity and significant flooding could still present challenges. Otherwise, the grain and oilseed markets continue to be headline driven, with fund managers keeping their eyes on the latest developments in Ukraine. Prices popped mid-morning Tuesday when another nuclear threat was issued by a Russian government official, although the pop in prices didn’t last long. Worries are increasing that Russia will block extension of the safe passage corridors, reducing corn, wheat, and oilseed flow out of Ukraine ports in the weeks ahead.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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