Perspective: Mid-Day Commentary for August 15

By: Arlan Suderman, Chief Commodities Economist

Thu, 15 Aug 2024, 15:56

Perspective: Mid-Day Commentary

Arlan Suderman

Chief Commodities Economist

August 15 - Wall Street chose to see the proverbial glass as half full today, focusing on strong retail sales and good weekly jobless claim numbers over that of week industrial output and housing numbers. Stocks continue to push higher at midday, while the VIX slips lower and the dollar follows Treasury yields higher. The VIX is trading near 15 at midday, while the dollar index is trading near 102.9. Yields on 10-year Treasuries are trading near 3.94%, while yields on 2-year Treasuries are trading near 4.11%. Crude oil prices are nearly 2% higher late morning on easing economic worries combined with escalating geopolitical risks, while the grain and oilseed markets are mixed.

Wheat prices found strength overnight from another missile attack on Ukraine's Odessa ports, but that story didn't carry much new in the way of export concerns. Black Sea cash wheat prices continue to carve out what may be a broad low, providing support beneath futures, but there's really not any reason to sustain a rally either at this time, unless fund managers decide to unwind their short positions. Soybeans bounced on solid export sales, while corn felt the weakness of farmers cleaning out their bins ahead of the big anticipated harvest that will soon be gaining momentum in the southern Midwest.

Exporters sold 49.4 million bushels of new-crop soybeans in the week ending August 8, according to this morning's USDA weekly export sales report. That brings new-crop export sales commitments to 216 million bushels, as shown below, with a little over three weeks left before the new marketing year starts. USDA has new-crop soybean exports set at 1.850 billion bushels. Based on a 10-year seasonal, we should have 707 million on the books by the first week of the new marketing year to maintain the seasonal pace needed to hit USDA's target for the new marketing year. That means that we need to see a very strong sales pace over the coming month to fill the gap. China has very little coverage on for the fall, so the opportunity is there, if China chooses to take advantage of these prices to do so. Unfortunately, we don't know their intentions. China aggressively imported from Brazil over the past six month, building up stocks that could help carry it through the fall until the new-crop Brazilian supplies become available.

We also know that the Brazil farmer is still sitting on roughly a fifth of his old-crop that he could also sell if China would choose to buy from there between now and then. The recent price break made U.S. soybeans competitive for the next several months delivery period, while discouraging the Brazilian farmer from selling. The Brazil farmer is currently finalizing his planting decisions. Planting will begin for most areas as soon after September 1 as the seasonal rains return. Our StoneX Brazil August 1 customer survey revealed expectations of maintaining soybean acres - maybe growing them a bit - and producing a 165 million metric ton crop this coming growing season, which would be up 16 mmt or 588 million bushels from last year's crop, if realized.

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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.

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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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