Perspective: Morning Commentary September 19

By: Arlan Suderman, Chief Commodities Economist

Fri, 19 Sept 2025, 13:30

Today's Perspective Video: China's Soybean Pivot Raises Questions for U.S. Agriculture

September 19 – Stock futures continued to have a positive bias overnight, as traders anticipate reports from the phone call between President Trump and Chinese President Xi, while also continuing to digest this week’s rate cut and comments from the Federal Reserve. The VIX is trading near 15 this morning, while the dollar index trades near 97.7 as it continues to follow Treasury yields higher following the Fed’s rate cut. Yields on 10-year Treasuries are trading near 4.13%, while yields on 2-year Treasuries are trading near 3.57%. Crude oil prices are trading modestly weaker, while the grain and oilseed sector traded mixed to firmer overnight.

Trump and Xi talked via a phone call earlier today, according to Chinese state media, with a focus on wrapping up a deal on TikTok, while also seeking to find a way to ease tensions between the two powers. It was the second such phone call between the two leaders during President Trump’s second administration. Media reports continue to talk about how the two nations are at odds over trade, but it is really much bigger than that. The two nations have very opposing value systems that are on a collision course. The United States has the world’s largest economy and it is seen as having the leading military. China has stated that it intends to replace the United States as the world’s largest economy and leading military. The United States’ core values are built around personal freedom and democracy, while China’s core values are built around central government control, which necessitates restrictions on individual freedoms and business decisions.

The clash of these core values play out in trade issues. China controls 90% of the world’s processed rare earth minerals and magnets that are essential for the production of many of the key electronics in our economy, but that also includes our advanced defense weapons. What incentives can we provide for them to release those rare earth minerals and magnets needed to sustain our economy and military? China still needs access to the vast U.S. consumer market to build its economy. What incentives can it give for the United States to grant access to its consumers? China is the world’s largest importer of commodities needed to support its economic growth? What incentive does it have to purchase those commodities from the United States, supporting our economy, if it can get those commodities from other nations that it does not see as competitors? Another sore spot between the two is the flow of fentanyl out of China, which is a major cause of drug-related deaths in the United States. Trump wants China to keep the drug and its components out of the United States, while China says that Trump is over-emphasizing the problem, which doesn’t set well with the millions of families affected in the States. Taiwan also remains a potential flashpoint between the two nations. Thus, you can see the complexity of the issues that Trump and Xi are dealing with, although the two also both have an incentive not to have a direct confrontation.

The U.S. Supreme Court will be deciding the legitimacy of some – not all – of President Trump’s tariffs in November. The court has scheduled opening arguments on the case for November 5. The whole world will be watching. Deals that have been made could unwind if the court rules against President Trump. Deals in the works are likely on hold until the decision is made later in November, and that includes China as well. There’s been no word out of today’s call between Trump or Xi yet that would suggest that commodities were discussed, let alone a deal on such reached. China has fully covered its soybean import needs already for September and October and has 40% of its November needs covered. There’s still about 12 million metric tons (440 million bushels) of unfilled demand through January, with Brazilian soybeans starting to arrive after that. China imported an estimated 22.9 million bushels from the United States in the past marketing year. Each week that goes by without a trade deal with China means more lost business, unless perhaps China agrees to buy large amounts of U.S. soybeans to build its reserves in exchange for garnering favorable access to the vast U.S. consumer market.

Canadian Prime Minister Carney traveled to Mexico this week to meet with President Sheinbaum. It was the first bilateral visit by a Canadian Prime Minister to Mexico in eight years, as Carney seeks to strengthen Canada’s relationship with Mexico. Carney’s predecessor had hinted that perhaps Canada needed to negotiate directly with the United States, leaving Mexico out, while Carney is taking a different approach. Carney believes that Canada would be better off working hand-in-hand with Mexico in their negotiations with the United States in next year’s scheduled revisit of the U.S.M.C.A. trade agreement. Tensions remain high between Canada and the United States, although there are signs that they are thawing somewhat, while President Trump and President Sheinbaum have found more common ground to work together. This may be a positive step toward getting trade agreements with the North American trading partners. The evidence continues to suggest that any such agreements will include language that puts high tariffs on transshipments from China.

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Matt ZellerWed, 05 Aug 2026, 12:39

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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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August 3 – The Dow Jones is up over 500 points as of the time of this writing, right in the range of the record high close just under a month ago; the marketplace at least appreciates the rhetoric from Trump calling for negotiations, and WTI crude oil dropping by around $5/bbl. The S&P and NASDAQ are also up 1% or better on the session, while treasury yields suffer chop lower on the day, with the ten-year note down slightly at 4.69% at this time.

Mike CastleMon, 03 Aug 2026, 15:10

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