Perspective: Morning Commentary for September 8

By: Arlan Suderman, Chief Commodities Economist

Thu, 08 Sept 2022, 13:27

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 8 – Rising interest rates and their anticipated impact on the global economy continues to be the primary topic of conversation on Wall Street, following this morning’s decision by the European Central Bank, and ahead of the Federal Reserve’s next meeting in less than two weeks. Stock futures were generally lower in early trade, while the VIX traded near 26. The dollar index traded near 110.0 this morning, after rising to a fresh 20-year high over each of the previous three sessions. Yields on 10-year Treasuries traded near 3.29%, while yields on 2-year Treasuries traded near 3.49%, as that inverse widens a bit again. Crude oil prices traded at their lowest level since mid-January overnight near $81 per barrel, before rallying this morning. The grain and oilseed sector is mixed in overnight trade.

First-time claims for unemployment benefits fell to 222K in the week ending September 3, down from 228K the previous week, and much below analyst expectations of 240K. That drops the four-week moving average to 233K claims, down from 240.5K the previous week. Continuing claims rose 36K in the week ending August 27 to 1.473 million, with the four-week moving average rising to 1.439 million. This is one of the key numbers to monitor as we watch for evidence of a slowing jobs market. The Fed needs to push the unemployment rate higher – likely to 5.5% or more – in order to slow wage inflation, which is one of the key components of overall inflation.

The European Central Bank raised its benchmark interest rate 75 basis points from zero this morning – it’s largest increase on record. It signaled that additional rate hikes were almost a certainty as it seeks to get inflation under control before the anticipated recession sets in. The move comes as inflation indicators heat up for Europe, with the ECB raising its inflation outlook to 5.5%, up from 3.5% previously. It’s amazing how slow central bankers around the world have been in recognizing the scope of the inflation problem, making them slow to respond to it. The whole purpose of the unprecedented fiscal and monetary stimulus programs during the pandemic was to stimulate demand. Demand increases when you increase the supply of money in the consumers hands.

Policymakers then seemed surprised to see inflation develop when demand exceeded levels for which the supply chains were designed to handle, even in normal times. Policymakers then failed to grasp in time the scope of action that they needed to take to withdraw that stimulus via monetary tightening. Most fiscal policymakers still don’t understand that. Traders seem to think that inflation can be brought down without slowing the economy, but that’s exactly what has to happen once inflation gets out of control. The economy must be slowed to the point of bringing money supply down so that consumer buying slows back to levels that can be supported by the supply chains. Simply slowing the economy with consumer fear won’t do it, because inflation jumps right back again once the fear passes. You have to reduce the money supply. Monetary policymakers now seem to understand that, but they generally lack support from fiscal policymakers – both here and overseas.

China continues to build a strategic trading partnership with Russia amid rising tensions with the United States and with much of the West. The latest agreement sees China paying for natural gas imports from Russia based on a 50-50 split between the ruble and the yuan, signaling a move away from the dollar as a global currency of trade. Bilateral trade between the two countries increased to $117.2 billion in the first eight months of this year, up 31.4% from the previous year’s pace. Chinese imports from Russia totaled nearly $73 billion, up nearly 51% from the previous year. The two countries are expected to continue to meet in the coming months to develop other trading partnerships that strengthen their relationship as China moves away from dependence on the United States. Yet, the United States continues to buy from China, suggesting a widening trade gap between the two countries.

Russia remains adamant that the safe-corridor arrangement for Ukraine grain shipments must change, while Ukraine argues that two-thirds of the grain leaving its ports is destined for poorer countries in Asia, Africa, and the Middle East. This remains another headline risk for the markets as it unfolds. Elsewhere, Argentina’s temporary offer of 200 pesos to the dollar for farmers who sell soybeans dumped 2.13 million metric tons (78 million bushels) on the market in the first two days, with Chinese buyers sweeping in to take a portion of that. Fundamentally, U.S. and global corn balance sheets are tightening, while soybeans are steady, or maybe even increasing. Exportable supplies of milling wheat are snug, but in balance with demand currently. USDA will weigh in with its revised production estimates and adjusted balance sheets on Monday. In the meantime, all of this is being traded within a broader context of recession fears. Fund managers are painting with a broad brush, expecting demand for commodities to tank as recession hits the global economy. That colors the filter through which traders interpret fundamental supply and demand data. That will change at some point. We don’t know when that will be, but it probably isn’t going to be near-term.

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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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

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