Perspective: Mid-Day Commentary for April 12

By: Arlan Suderman, Chief Commodities Economist

Wed, 12 Apr 2023, 15:30

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

April 12 - Core inflation remains sticky, justifying another 25-basis point rate hike, based on this morning's data within the context of previous statements from the Federal Reserve. As such, this morning's stock rally on the headline numbers quickly ran out of gas as the initial drop in Treasury yields reversed course. The VIX continues to trade near 19, so there's no real panic on Wall Street. The dollar index is trading lower near 101.7. Yields on 10-year Treasuries are trading near 3.41%, while yields on 2-year Treasuries are trading near 4.00%. Crude oil prices are more than 1% higher at fresh four-month highs, raising renewed inflation risks going forward, with gasoline prices hitting fresh five-month highs this morning. That suggests that next month's consumer price index may not have as friendly of headline number as what we saw this morning. Grain and oilseed prices are mixed at mid-morning.

Weakness is seen in the new-crop corn and soybean contracts this morning as the forecast continues to look favorable for this year's U.S. crops in the Midwest. Much of the Midwest should see warm dry conditions to spur active fieldwork over the next 10 days, while the rapidly developing warmth is quickly melting the deep snowpack in the northwestern Ag Belt. This combines with expectations of a favorable summer to strengthen the outlook for the 2023 crop. Meanwhile, old-crop supplies remain tight, providing support for the nearby contracts, while wheat garners support from losses in the Southern Plains combined with renewed concerns about the Ukraine grain initiative.

The current focus is on spring weather for planting, but what does the summer hold following three years of a La Nina pattern? The models continue to move in the same direction, calling for an El Nino weather pattern to develop at some point this summer. In fact, the most aggressive models have us in an El Nino weather pattern by May, with a strong El Nino - maybe even a super El Nino - by late summer. The less aggressive models have been slowly shifting El Nino's development forward, with greater strength. Some forecasters remain skeptical, but the models are shifting in that direction. Two of the major long-term models are shown below - the NMME & the ECMWF - for June, July, and August. These models generally show normal to above normal rainfall for the bulk of the Ag Belt this summer, with a more southern Bermuda High that could reduce hurricanes, although it may also stifle rainfall at times along the East Coast and Gulf Coast. Temperature forecasts for the summer have largely varied from modestly above normal to modestly below normal. Overall, this is what we might expect from an El Nino summer. This is contingent on expectations that currently cool waters off the West Coast will warm, which the models expect to happen over the next 60 days or so. Note, however, that the Canadian Prairies may not be as fortunate with rainfall amounts this summer. The below graphics were provided to me by Eric Snodgrass of Nutrien Solutions. Correspondingly, BAMWX has a similar outlook, focused on analog years of 2017, 2014, 2011, 2009(2X), and 1997. The average corn yield from those years would be 4.5 bushels above a 30-year straight-line trend yield. My math would therefore put such an anomaly above 184 bushels per acre IF it were to verify.

Two major models in relative agreement for Midwest summer rainfall. SOURCE: NMME, ECMWF, WeatherBell, & Nutrien

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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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Matt ZellerWed, 05 Aug 2026, 12:39

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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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