Perspective: Morning Commentary October 7

By: Arlan Suderman, Chief Commodities Economist

Tue, 07 Oct 2025, 13:28

Today's Perspective Video: Government Shutdown, OPEC Moves & China Trade Hopes

October 7 – It’s day #7 of the partial government shutdown. The headlines continue to flow regarding the political deadlock in Washington, and how harmful it is to the economy, but stocks continue to grind higher with new record highs. Momentum may be slow, but the slow grind remains higher built on expectations that the Federal Reserve will sustain an active rate cut cycle when it meets later this month. The VIX is trading near 16 this morning, while the dollar index trades near 98.5 as it tests the upper end of the trading range that has largely contained it over the past six to eight weeks. Crude oil prices traded modestly weaker this morning, while the grain and oilseed markets were mixed to firmer ahead of this morning’s pause in trading.

The government is closed, limiting the amount of data flowing into the commodity and equity markets, while China remains closed for a weeklong holiday. That limits the headlines available to drive trading, leading the markets to lean more on technical signals and momentum. We occasionally get a headline from President Trump to drive trading action, which has generally been supportive in recent days for the commodity sector, while equity traders remain locked in on rate cut hopes amid a lack of data releases to tell them otherwise.

Gold prices continue to ride momentum higher amid the larger picture of uncertainty, seeking a record high of $4,000 per ounce. The precious metals sector has been the highest performing sector over the past 12 months according to our StoneX commodity index tracker. The precious metals sector was up 46.1% year-on-year at the end of September, leading all other commodity sectors. The livestock sector was a distant second at a solid 24.7% year-on-year gain. The next closest sector was the softs at just a 2.1% gain. The grain and oilseed sector continues to struggle, being down 5.3% year-on-year at the end of September, with industrial metals down 1.0%. The energy sector posted miniscule 0.4% gains. Put it altogether, and our composite basket of 27 commodities gained 7.2% year-on-year through the end of September. There’s been increased talk of inflation on Wall Street, and that has some data to back it up. However, the commodity sector as a whole is not yet showing that typical tendency, outside of the previous metals and livestock.

Commodity prices benefit from a weaker dollar, but the greenback’s slide came to a halt late summer as the slide in Treasury yields slowed, and as competing currencies encountered weakness. The euro is the dollar’s greatest competitor, but it faces growing uncertainty in Europe as reflected by the political chaos currently seen in France. Pressure mounted today on French President Macron to either step down or to call another snap election after the past five administrations appointed by Macron failed to create a legislative coalition needed to run the government. Meanwhile, the Japanese yen is under pressure amid political challenges in Japan. Sanae Takaichi is expected to become Japan’s next prime minister. She campaigned on promises to aggressively increase spending, while criticizing the Bank of Japan for raising interest rates. The combination of a weaker euro and weaker yen makes it difficult for the dollar to sustain a weaker trend needed to help demand for commodities overall in the near-term, and risks sending the dollar back higher again if these problems escalate.

Crude oil prices recently hit four-month lows amid the move by OPEC+ to grab market share away from North American shale oil producers at a time when a sluggish global economy continues to keep demand growth soft. One bright spot on the demand front has been Chinese buying, as it continues to stockpile reserves at a time when supplies are relatively cheap. China sees how the United States cut its reserve supplies in half in recent years at a time when geopolitical tensions are continuing to escalate. As such, it continues to take advantage of the sanctions of the West that have forced Iran and Russia to sell oil cheap on the dark market to build its reserves. Reuters reports that state oil companies are adding at least 169 million barrels of storage at 11 different sites in 2025 and 2026, allowing China to store two weeks worth of crude oil imports. It’s estimated that China stockpiled an average of 530K barrels per day thus far this year, with the stockpiling expected to continue into 2026 as well. This would help China avoid shortages should it face sanctions of its own connected with a move on Taiwan or other conflict.

USDA suspended Thursday’s WASDE crop report until further notice due to the partial government shutdown, but pre-report industry estimates were collected anyway. They reflect expectations that the corn yield fell another 1.7 bushels to 185.0 bushels per acre, while the soybean yield fell 0.3 bushel to 53.2 bpa. Trade expectations put ending corn stocks at 2.231 billion bushels, suggesting that USDA will not fully account for last week’s higher corn stocks by lowering old- and new-crop feed usage. Soybean ending stock estimates remained at 299 million bushels, which totally ignores the fact that we’ve already missed out on over 300 million bushels of Chinese demand.

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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

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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

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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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