Perspective: Morning Commentary October 16

By: Arlan Suderman, Chief Commodities Economist

Thu, 16 Oct 2025, 13:33

October 16 – It’s day #16 of the partial government shutdown, and there is little evidence that it will end any time soon, although there is some hope that it may occur after this weekend’s anti-Trump demonstrations. Yet, stock futures posted modest gains again overnight, on strong bank earnings and optimism regarding artificial intelligence. The VIX is trading near 20, reflecting elevated levels of nervousness on Wall Street, while the dollar index slipped lower to trade near 98.6. Yields on 10-year Treasuries traded near 4.04%, as they continue to consolidate just above the 4% level, while yields on 2-year Treasuries are trading near 3.51%. Crude oil prices were quietly higher this morning, while the grain and oilseed sector was mixed, with soybeans posting modest gains, wheat posting modest losses, and corn prices caught between the two.

President Trump sees U.S. mineral companies playing a critical role in the future national security of the United States amid China’s actions to monopolize these essential products – limiting them to China’s use, and to the use of its friends. Such a monopoly combined with export restrictions allow China to pick global winners and loses in both economic growth and military strength. China balked at President Trump’s threat of 100% tariffs on Chinese consumer goods if it goes ahead with the export restrictions, and it accused the United States of stoking panic among other countries of the world with its rhetoric. But it also refused to take a phone call from the White House to discuss the matter, even though publicly it continues to say that these matters should be resolved through talk. The U.S. Trade Representative told the media that it was caught off-guard by the increased restrictions announced by China on Thursday of last week, so it attempted to reach Chinese authorities by phone to discuss it and those officials refused to take their call, leading to President Trump’s reaction.

China’s decision to limit exports came as the Trump Administration began investing in mining companies here and in Greenland to access our own supply of rare earth minerals and magnets, combined with implementation of the “warp speed” process to accelerate permitting to quickly get these companies active in acquiring the minerals that we need. That meant that China had a narrow window of opportunity to use the strongest leverage card that it has available to it – its monopoly of critical rare earth minerals and magnets. For its part, China says that President Trump has distorted actions taken by China to halt exports of rare earth minerals and magnets, and that it is simply applying export controls that align with international practices. They say that export licenses will be approved as long as the applications fulfill the requirements, and that they are for civilian use only. What they don’t say is, they intend to keep militaries around the world from developing defense weapons that require these minerals, and that “meeting the requirements” often necessitates that buyers give away proprietary information on the production of products that use the rare earth minerals and magnets.

Previous negotiations this year between the United States and China have been quite respectful, with negotiators seeming to develop quite the friendly relationship. That too has changed, with U.S. Secretary of Treasury Bessent describing China’s chief negotiator as “slightly unhinged” and “disrespectful” in stating that he had threatened to “unleash chaos on the global system” if the United States went ahead with its plans to charge port fees for Chinese built, owned and/or operated ships, where Chinese policy had also garnered a monopolization of global trade. The bottom line is that relations between China and the United States have soured considerably after China applied the export restrictions on rare earth minerals. That notably decreases the chances of seeing a significant commodity trade deal in the near future, and specifically it doesn’t bode well for soybean export demand.

China’s primary method of sustaining its economy is to issue bonds that inject money into it, keeping some life in it, but that also adds to its government debt level. The Chinese government issued 11.46 trillion yuan ($1.6 trillion) of bonds in the first nine months of this year, up nearly 60% from the same period last year. China’s economy is largely relying on this government debt spending to keep its factories running and to keep consumers spending. However, bond issuance slowed over the past couple of months as debt levels rose, leading to concerns that we might see further headwinds for China’s economy. This doesn’t necessarily mean that China’s economy is about to collapse, but it does suggest that the challenges facing President Xi Jinping are growing. He’s willing to face those challenges rather than to yield to President Trump because he’s playing the long game. He’s willing to allow China to suffer in the short run to reach his goal of overcoming the United States so that he can reach his stated goal of having the top military and top economy in the world. Controlling 90% of the processed rare earth minerals and magnets in the world was to become his ticket for doing so. That’s the card that he is now playing in this high stakes game. That drops soybean trade considerably down the list of priorities for him.

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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: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

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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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