Perspective: Morning Commentary September 17

By: Arlan Suderman, Chief Commodities Economist

Wed, 17 Sept 2025, 13:50

Today's Perspective Video: Will We See A Trade Deal with China?

September 17 – Today is the day that we hear from the Federal Reserve. Stock futures were very quietly mixed overnight, just below record high levels, as investors anxiously waited for this afternoon’s central bank policy statement, along with its updated analysis and projections. The VIX traded near 16 in early trade, while the dollar index traded near 96.8, bouncing off yesterday’s 11-week low. Yields on 10-year Treasuries are trading near 4.02%, as they continue to consolidate just above the 4% level, while yields on 2-year Treasuries are trading near 3.52%. Crude oil prices are modestly weaker this morning, while the grain and oilseed markets were mixed to firmer on reports that President Trump is expected to travel to Beijing next month.

Housing starts fell to an annualized rate of 1.307 million units in August, down from 1.429 million in July, and below analyst expectations of 1.370 million. Permits for new starts fell to an annualized rate of 1.312 million in August, down from 1.362 million in July, and below analyst expectations of 1.370 million. Single-family housing starts fell to an annualized rate of 856K in August, down 2.2% from 875K in July. Privately owned housing completions in August rose to an annualized rate of 1.608 million units, down 8.5% from 1.429 million in July, and 6% below the 1.391 million completion rate in August 2024. Single family housing completions in August fell to an annualized rate of 1.090 million, up 6.7% from the July total of 1.022 million. News reports of anticipated Fed rate cuts no doubt had an impact on decisions on whether to start housing units in August, on top of the ongoing uncertainty in the economy. It’s interesting to note that last week’s break in interest rates resulted in a 25.5% week-on-week increase in refinancing applications, following a 12.2% rise the previous week. Mortgage applications last week for new home purchases rose 2.9% on the week, after rising 6.6% the previous week.

A glimmer of optimism for a commodity trade deal with China emerged once again overnight on reports that President Trump is expected to travel to Beijing late next month around the time of the APEC conference in South Korea. There’s been no confirmation of the State visit yet, but the two are expected to speak by phone on Friday, and it is widely believed that this week’s Madrid meetings helped paved the way for the anticipated face-to-face meeting. Media sources indicate that Beijing sent a formal invitation to the White House earlier this month. Typically, the two don’t meet in person unless there is an agreement to sign, raising hopes that a deal can be reached. Such a deal might include rare earth minerals and magnets, advanced technology, grain and oilseeds, energy, or possibly a mix of the above. I’ve been skeptical that we would see a major deal signed prior to the U.S. Supreme Court ruling in November on the legality of Trump’s reciprocal tariffs, but it’s still possible that the two leaders could have enough other leverage on each other to reach a deal.

The U.S. Environmental Protection Agency issued its proposal on Tuesday for reallocating the small refinery exemptions for 2023-2025 to larger refiners in 2026 and 2027. Earlier this summer the EPA posted its proposal for Renewable Volumetric Obligations (blending requirements) of 24.02 billion gallons for 2026, which includes 15 billion gallons of conventional fuels like ethanol, along with 9.02 billion gallons of advanced biofuels. For 2026, that would include 5.61 billion gallons of biomass-based diesel, while those numbers rise slightly for 2027. The EPA also recommended giving just 50% credit for imported feedstock. Last month the EPA cleared its desk of small refinery exemption applications going back to 2016. Those granted prior to 2023 cannot be used to reduce obligations going forward. The remaining SRE’s for 2023 and 2024 totaled 1.4 billion Renewable Identification Numbers. Adding in 2025 SREs brings the total to an estimated 2.18 billion RINS.

Yesterday, the EPA released several options for consideration for reallocating those granted SREs to larger refiners, which would increase the obligation of those larger refiners while sustaining stronger demand for the biofuels, and therefore for the feedstock used to produce them. One proposal is for 100% reallocation over the next two years. The second is for a 50% reallocation, while the third option would be for some middle ground, such as 0%, 25% or 75% reallocation. The EPA will accept comments from the industry over the next 45 days before making its final decision. This is all complicated by a bill introduced in the U.S. Senate that would prevent the EPA from reallocating any of the SREs. All of this could be further complicated by whether the EPA adjusts its 50% credit for imported feedstock as the oil industry has been pressuring it to do. The bottom line is that any reallocation is supportive for the biofuel industry, but the uncertainty will likely keep considerable production sidelined for a while longer while all of this is decided. That could take another couple of months, or much longer. Each time the industry thinks that it is getting clarity from the EPA, the agency opens another area of uncertainty, keeping production sidelined until we get more answers.

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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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