Perspective: Morning Commentary January 20

By: Arlan Suderman, Chief Commodities Economist

Tue, 20 Jan 2026, 14:26

January 20 – The broader markets slipped into “risk-off” mode overnight, as investors react to the growing riff between Europe and the United States over Greenland. Stock futures traded notably lower overnight as tensions rapidly escalated between the two regions, sending the VIX to fresh eight-week highs above 20. The dollar index broke to a two-week low below 98.4. Yields on 10-year Treasuries traded to a nearly five-month high above 4.31%, while yields on 2-year Treasuries probed above 3.61%, with the yield curve rising once again. Crude oil prices rallied modestly, while the grain and oilseed markets were mostly lower overnight.

Gold and silver prices hit fresh record highs this morning amid rapidly escalating uncertainty as President Trump doubles down on his insistence that the United States control Greenland. European leaders are furious with Trump after social media posts were attributed to him showing the president in Greenland holding a U.S. flag, with another post showing him speaking to leaders next to a map showing Canada and Greenland as part of the United States. Trump has also threatened tariffs against countries who stand against his efforts to control Greenland. That raised the risks of a revived trade war between the United States and the European Union, with EU leaders also calling for a new independent EU that doesn’t need the United States.

The question is, what is President Trump’s end game? It’s seldom the obvious. Trump is always playing 3-D chess. He says something to trigger a response that will reach an objective that may at first glance appear totally unrelated. It’s no secret that the United States needs rare earth minerals for its manufacturing industry, and for its national defense, and China currently has a monopoly on the supply of processed rare earth minerals and magnets. But the same is true for Europe as well. It’s fighting the same battle with China. But access to rare earth minerals are only a piece of the equation. China possesses roughly half of the world’s supply, but more than 90% of the processing. It’s believed that Venezuela may have half as many rare earths as China, but they still would need to be processed, which is an environmentally dirty process. Greenland and Ukraine are additional possible sources of rare earths for Europe and the United States. It may be that President Trump is worried that the EU’s strict environmental regulations would never allow it to develop the processing capacity for rare earths, making it incumbent upon the United States to do so for the security of the West. It’s no secret that Europe has also been dependent upon the United States for its own security for decades post-World War II. Is it willing to devote sufficient resources from its economy to its national defense? That’s something that President Trump has been pushing Europe to do since his first term in office. I don’t pretend to know what President Trump’s motives are, nor to defend him. But there is value in trying to dig beyond the rhetoric to gain a deeper understanding of the motives and end goals to anticipate the likely end game, and its implications for the commodity sector.

China released a plethora of economic data for 2025 in recent days, sending a mixed signal regarding what’s really going on within the country. Retail sales, which provide a measure of consumer activity, fell for the seventh consecutive month in December, being down 0.9% year-on-year, down from a rise of 1.2% in November. Full-year retail sales rose 3.7% on the year, falling short of expectations of 4.1% growth. Auto sales were down 5% on the year in December, while home appliance sales fell 18.7%, and furniture sales dropped 2.2%. Digital device sales saw growth because they are nearly the only category in which government subsidies are still driving demand. Fixed asset investment dropped by 3.8% on the year, while property investment fell by another 17.2% year-on-year, with infrastructure investments also down 2.2%. Home prices were down 3% on the year in December, versus -2.8% in November. However, China did see industrial output rise by 5.2% in December, helping it to reach its coveted 5% annual GDP growth according to official Chinese statements. This suggests that China is still relying on a production-focused strategy to absorb labor market shocks caused by the economic slowdown, further prolonging the imbalance between supply and demand, creating a lingering deflationary environment, and forcing China to export excessive production to the global market to sustain itself while piling up greater amounts of fiscal debt. But perhaps of greatest concern long-term is that just 7.92 million babies were born in China in 2025, down from 9.54 million in 2024, and the lowest since the country was founded in 1949. As a result, China’s population fell by another 3.39 million in 2025, and its steepest population decline of the modern era.

Some cash sources report that China completed purchase of the 12 million metric tons of US soybeans committed to in the handshake trade deal on October 30. USDA still needs to catch up in reporting, but this means that the market will no longer likely have the regular reports of purchases feeding the bulls as Brazil ramps up harvest of its much cheaper 2026 crop.

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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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