Perspective: Morning Commentary November 4

By: Arlan Suderman, Chief Commodities Economist

Tue, 04 Nov 2025, 14:24

Today's Perspective Video: USDA Correction Coming

November 4 – It’s day #35 of the partial government shutdown, tying it with the previous record shutdown that ended in January 2019. Stock futures came under notable pressure overnight following warnings from a couple of major banks that a correction in equities could lie ahead following the recent push to record highs. The tech sector led in the losses since it had led the way higher on the rally driven largely by AI euphoria. The VIX pushed above 20 overnight on the selloff, although it has since pulled back to trade near 19, while the dollar index trades near 100.1. Yields on 10-year Treasuries are trading near 4.10%, while yields on 2-year Treasuries are trading near 3.58%. Crude oil prices are trading 1% lower this morning, but they’re continuing to consolidate just above $60 per barrel. The grain and oilseed sector traded mostly lower led by double-digit losses in soybeans after the recent rally pushed prices back above Brazilian price levels for Chinese buyers, and due to frustration that China has not yet lifted the retaliatory tariffs as promised.

The partial government shutdown is on pace to set a record for length tomorrow, although this one has a different feel to it. The shutdown is certainly creating stress for many families of government workers, but it’s impact thus far on the broader economy has been somewhat limited. The Trump Administration has thus far found money to pay those serving in the military, while also making partial food assistance programs once the courts provided some legal guidance on the matter. The Administration found resources to release a key inflation report ahead of the last Federal Reserve meeting, while the Energy Information Administration continues to release key energy data. The military pay and partial food assistance payments have certainly benefited those receiving them, but they have also removed some of the key pain points that often drive Congress to find solutions to the deadlock creating the shutdown. This leaves us vulnerable to a longer shutdown – perhaps much longer as the filibuster in the Senate continues to block the ability of Senator Thune to even bring the continuing resolution for funding the government to the floor for debate and for a vote. The few reports that are being released are good, but the markets continue to largely fly in the blind with the vast majority of data points still not being published.

Yet, the private sector reports continue to provide some guidance for Wall Street. One of those reports will be the private sector ADP monthly jobs report, due out tomorrow morning. The trade expects it to show private sector jobs growing by 28K in October, after contracting by 32K in September. That’s because ADP’s weekly employment data showed modest weekly growth in October. Similar trends were seen by Revelio labs. Private sector job cut announcements are generally trending lower as well after peaking in the first quarter. Private sector job posting data continues to show a trend toward lower postings, although we should get updated data on that in the JOLTS report later this morning. Corporate firms continue to shrink their fixed costs amid the tariff uncertainty by not filling open positions, but overall layoffs remains low. The headlines speak of big layoffs due to artificial intelligence replacing jobs, but the macro data is much less worrisome. The question is, will we see a new level of certainty emerge now in the wake of the late October trade deals, including with China, or will we see continued disruption? Small business surveys suggest an uptick in future hiring plans, providing a glimpse of hope.

Brazilian soybean basis broke by more than 25 cents per bushel on reports that the United States reached a trade deal with China to buy U.S. soybeans. That coincided with a surge in U.S. soybean futures on the news that pushed U.S. soybean prices delivered to China to a higher cost that that of Brazilian soybeans, and U.S. soybeans still have the 20% retaliatory tariffs on top of that. As such, Reuters reports that crushers took advantage of the arbitrage to quickly buy 10 cargoes of Brazilian soybeans for arrival in December on Friday night. Yet, our cash sources in China tell us that they largely remain on the sideline amid weak crush margins and uncertainty over government guidance. They see reports of a deal that will obligate China to buy 12 million metric tons over the next couple of months, with the retaliatory tariffs to be lifted. However, the tariffs have not yet been lifted, and buyers have thus far received little to no guidance from the government. That said, crushers will continue to buy hand-to-mouth from South American sources until those tariffs are lifted, and they feel “safe” to buy U.S. commodities once again. Their take on the deal thus far is that it remains “fragile.”

StoneX customer survey pegged the corn yield at 186 bushels per acre, up from 185.9 bpa the previous month, but down from USDA’s September estimate of 186.7 bpa. The soybean yield was pegged at 53.6 bpa, down from 53.9 bpa in October, but above USDA’s September estimate of 53.5 bpa. USDA is expected to update its production estimate on November 14, despite the partial government shutdown. This year’s production estimate will lack much of the actual field data that USDA typically relies on for its estimate, depending on customer surveys instead.

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Matt ZellerTue, 04 Aug 2026, 12:43

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