Perspective: Morning Commentary for September 30

By: Arlan Suderman, Chief Commodities Economist

Thu, 30 Sept 2021, 13:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 30 – It’s the end of the fiscal quarter today, as well as the end of the government’s fiscal year. Congressional leaders report this morning that they have reached a deal to fund the government through early December, but no bill has yet been sent to the president’s desk. Yet, Wall Street tends to not be overly concerned about keeping the government open, but it is far more focused on the plethora of other issues facing the country. For today, the end of the fiscal quarter is set to start with modestly higher stock values, with the VIX slipping lower to trade near 22. The dollar index pushed to a fresh one-year high 94.5 this morning, while yields on 10-year Treasuries sit near 1.54%. Crude oil prices were more than 1% lower in this morning’s trade, while the Ags were mostly higher ahead of today’s USDA quarterly stocks and small grains summary reports.

First time claims for unemployment benefits totaled 362K for the week ending September 25, up from 351K the previous week. That raises the four-week moving average to 340K claims, up from 335.75K the previous week. Continuing claims for those still unable to find work fell another 18K to 2.802 million people. Those numbers are not quite down to pre-pandemic levels, but they’re getting close. Continuing claims are the lowest since the week ending March 21, 2020, when the total sat at 2.072 million.

However, we need to closely monitor the weekly claims numbers as new policies that mandate vaccines take effect. I’m not speaking here to the pros or cons of the vaccine, but rather to the reality that there is a significant sector of the population that is resistant to taking it, to the point of being willing to forfeit their job rather than to be forced to get the jab. Fed Chair Jerome Powell suggested that it may take considerable time before we get to full employment when he would feel comfortable reversing his easy-money policy stance. This may be one of the reasons that it will take time to get to full employment. We do not know yet how implementation of the new policies will impact the unemployment numbers, but we do know that many agencies and businesses under such policies have begun to let people go who have not yet been vaccinated. Ironically, this comes at a time when national Covid numbers have been falling over the past month, with some states in decline for nearly two months, while a few states are still seeing their numbers on the rise.

Inflation continues to be the hot topic on Wall Street, combined with discussion of the massive spending bills being considered by Congress. House Majority Leader Nancy Pelosi proposed suspending the debt limit, rather than raising it. Suspending it would help Congress avoid needing to make substantial increases to the debt limit to accommodate implementing the spending bills that it would like to approve. Wall Street is largely still discounting passage of the spending bills. It likes the increased money flow that could benefit the markets, but it worries about the inflationary effects that could negatively impact the economy. Supply chain disruptions will likely remain with us for quite some time, and the extra fiscal and monetary stimulus increase demand to further aggravate the supply chain disruptions. Inflation is very real in the commodity sector – albeit in some specific commodities more than others. The rising dollar reflects near-term movement of foreign money into the U.S. markets to take advantage of our higher yielding securities, but also creates headwinds for the commodities. Thus far, those headwinds have been overshadowed by increased demand for commodities relative to supply. Many traders also see ownership of commodities as a way to hedge against inflation risks in their portfolios.

Today’s focus in the Ags will be on USDA’s quarterly grain stocks and small grains summary reports. These reports are known for their market-moving surprises. I can generally predict which direction a surprise would likely be in USDA’s monthly WASDE reports. That’s more challenging for the quarterly stocks reports. USDA’s bullish corn stocks report surprises the past two years were anticipated and made logical sense. But my analysis over the long-term is that both the direction and scope of surprises in the stocks reports generally lack logic, and they are therefore difficult to predict. There are several potential reasons for that, but for our purposes today, the point is that grain and oilseed traders have to be prepared for anything on these quarterly reports. Beyond today, the focus fundamentally shifts back to the size of the crops. I do see increasing evidence that we may be looking at an increase in the soybean yield that could ease some supply concerns, while corn yields still show conflicting signals from region to region. However, I would also warn that I see signs that the outside markets influences may be higher than normal in the weeks ahead tied to the factors outlined above.

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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.

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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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