Perspective: Morning Commentary January 6

By: Arlan Suderman, Chief Commodities Economist

Tue, 06 Jan 2026, 14:26

Today's Perspective Video: China and Venezuela - The Hidden Connection

January 6 – It’s day #3 of the new trading year, and many of the headlines are focused on Venezuela rather than the Federal Reserve, or the U.S. economy, and understandably so. Yet, there is a focus on this week’s critical jobs data that will likely have a longer-term impact on monetary policy from the Federal Reserve. Stock futures were quietly mixed for the most part overnight, with the VIX trading near 15, and the dollar index trading near 98.4. Yields on 10-year Treasuries traded near 4.17% as they continue to consolidate just below 4.2%, while yields on 2-year Treasuries trade near 3.46% as the yield curve continues to steepen, despite the Fed’s policy. Crude oil prices firmed again overnight, while the grain and oilseed complex was quietly mixed.

The implications of President Trump’s extraction of Venezuelan President Maduro to face drug and weapons charges continue to play out. Those who support the president generally can provide lots of reasons why it was the right thing to do, while those who oppose can do the opposite. My focus will primarily be on the implications for the commodities as played out in geopolitical shifts. Venezuela obviously has the world’s largest known reserves of crude oil, but the infrastructure for production and export of that oil is in disrepair. U.S. companies largely developed the industry, but they were dismissed from the country. They’re going to be reluctant to return with massive investments until they have some reassurances of political stability. That becomes the challenge. Delcy Rodriquez is now on top of the government of Venezuela. She has strong Maduro ties, but she also has a power structure in place to avoid a power vacuum that could create civil war. That will be a challenge for Trump to navigate. The bottom line is that peace and business confidence are essential for investment in the oil industry.

As for Ag imports, Venezuela imported less than 1 million metric tons combined of corn, soybeans and wheat from the United States in the first nine months of this year, but they have been our top export customer for soybean oil thus far this year. That said, Ag imports are not expected to be significantly impacted by the actions thus far as long as civil war can be avoided. Receiving very little focus are the vast reserves of rare earth minerals believed to be in Venezuela. China currently holds a near monopoly on processed rare earth minerals that are essential for much of today’s high tech manufacturing ability, but also for the production of critical defense weapons. It is currently withholding export of those rare earths to the United States and Europe, except for limited use for manufacturing in non-defense industries under heavy restrictions. It just took action to block all exports of rare earths to Japan that could be also used for defense purposes. But the South China Post reports that Trump’s actions in Venezuela are partly about securing access to Venezuela’s vast reserves of rare earth minerals, even as China was taking steps to secure a partnership with the country. Venezuela’s southern Guayana Shield region has vast reserves of rare earths, along with gold, diamonds, iron ore and bauxite. China’s current monopoly over rare earths gives it the ability to choose global winners and losers in both manufacturing and in national defense, and access to supplies in Venezuela could help break that monopoly. They’re largely undeveloped, so it would take years before significantly impacting the global balance of power, but the rare earths are no doubt a factor.

Social media in China continues to actively talk about the Trump actions in Venezuela, believing that Trump gave China a blueprint for “reunification” of Taiwan to the Mainland – something that President Xi Jinping has assured his country will one day happen. China could very easily make that argument, although it is doubtful that its military has the same capability at this point to carry out such an operation. That is one reason why it continues to have periodic “war games” around Taiwan – to test out those capabilities. Xi recently removed several key generals in an anti-fraud campaign, so last week’s live fire war games around Taiwan were both a display of force and a test of military readiness. Chinese ground forces are not as tested as U.S. forces in hostile territory, although I’m sure Taiwan does not want to be the test case for assessing that. The bottom line here though is what is China’s perception? Does it see this as an option for reaching its objective. This remains the biggest potential flashpoint that could undo the October 30 handshake trade deal with the United States.

China bought another 10 cargoes of U.S. soybeans yesterday, according to our cash sources, with some saying the purchase may have been as large as 1 million metric tons. USDA confirmed 12.3 mmt, or a little over half of the total purchased this morning. Regardless, our cash sources indicate that this now brings total Chinese purchases over 10 mmt, versus USDA confirmations of more than 6 mmt. It’s looking more likely now that China will make the full 12 mmt commitment of soybeans as it honors the “truce” reached with President Trump on October 30, although the question still remains over when shipment of those soybeans will occur due to logistic issues at China’s ports. Meanwhile, Brazil’s harvest of cheaper soybeans is slowly gaining momentum.

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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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