Perspective: Mid-Day Commentary for August 22

By: Arlan Suderman, Chief Commodities Economist

Fri, 22 Aug 2025, 16:00

Today's Perspective Video: Big Crops Get Smaller

August 22 - Federal Reserve Chair Jerome Powell had his day on the stage. Wall Street liked what he had to say, leading to a surge in stocks and a sharp decline in Treasury yields. Powell acknowledged the economic stimulus pieces of the recently passed tax bill, while speaking of the inflationary risks and economic growth risks of the tariffs. Powell stated that the Administration's immigration policy is impacting the labor market by reducing the number of available workers. Specifically, Powell stated that, "While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly. It is also possible, however, that the upward pressure on prices from tariffs could spur a more lasting inflation dynamic, and that is a risk to be assessed and managed.”

Powell stated that the Fed's current monetary policy is restrictive, and that gives it some room for lowering rates to encourage economic activity, while monitoring inflationary risks, which he acknowledged could be a one-off increase due to the tariffs. He stopped short of saying that the Fed would cut rates, but certainly left that door open, which was not missed by Wall Street. The FOMC next meets on September 16 & 17, with additional key labor and inflation data expected before then. Powell also outlined the new policy framework within which it will make future decisions, which emphasizes that maximum employment is dependent on price stability, putting a higher focus on containing inflation, which is currently moving away from the 2% mandate.

Reuters reports that Canada will remove its retaliatory tariffs on some U.S. goods as a goodwill gesture attempting to jumpstart the trade talks with the Trump Administration. Unnamed sources told Reuters that Canadian tariffs on autos, steel and aluminum will remain in place, but that tariffs on several other unspecified products will be removed. This provides a positive sign that we may be able to move toward a trade agreement with Canada. Goods covered by the USMCA are currently not impacted by the current trade spat. Mexico also lacks a trade deal with this Administration, but President Trump granted it another 90-day suspension of the threatened tariffs to negotiate a deal.

The U.S. Environmental Protection Agency began clearing its backlog of Small Refinery Exemption requests today. Reuters reports that it denied 28 SREs, while approving 63 full waivers and granting 77 partial waivers. The exemptions reportedly amount to 5.34 billion RINS across multiple years. The EPA will return RIN credits to refiners who complied with the law and who were granted exemptions. However, RIN credits returned for years before 2023 will not be able to be used for future compliance obligations. The EPA has also told lawmakers that it plans to issue a supplemental RVO blending proposal for the 2026 - 2027 years, according to Reuters. This doesn't answer all of the questions hanging over the biofuel industry, but it reduces some of the unanswered questions. The primary questions still hanging over the industry are the potential offsets required of larger refiners for these SREs and whether the EPA will change its rule in the RVO granting just 50% credit for foreign feedstock? Today's announcement means that roughly 1.39 billion RINS are up for reallocation for years 2023 and later, with the EPA in the process of sending its proposal to the White House's Office of Management and Budget.

Stocks surged on Powell's comments as Treasury yields fell. The Dow Jones Industrial Average rallied more than 900 points to new highs on expectations of future rate cuts. The VIX fell below 15 on Powell's comments, while the dollar index is trading near 97.8. Yields on 10-year Treasuries are trading near 4.26%, while yields on 2-year Treasuries are trading near 3.69%. Crude oil prices are modestly higher on the positive tide of Wall Street optimism, while the grain and oilseed markets are mixed following a strong day yesterday. Soyoil prices added to their recent gains on the news, while soybeans also garnered modest support from unconfirmed rumors that China "might" be sniffing around for some beans to purchase. Corn and wheat prices also had a positive tone, but without much conviction ahead of the weekend.

Next up is USDA's September WASDE report. It will be sending scouts out to sample fields across the country over the next couple of weeks in preparation for its September production estimate. That will provide the first genuine yield estimates based on extensive field sampling. Next comes the actual harvest results. No matter what the final yield is, we know that this year's crops will be big. We just don't know how big yet. Regardless, we will have storage problems, especially in the northwestern Midwest where rail typically pulls soybeans toward the Pacific Northwest to export to China. The absence thus far of China buying has the rail market basically dead in that area. That leaves a limited amount of storage for a bumper harvest. Basis has already taken it on the chin, and the worst is probably not here yet. The impact of the trade war standoff is now about to be felt if we don't see some aggressive Chinese buying soon - very soon. A cargo here or there won't cut it. It would need to be aggressive buying, and we thus far see little evidence of such.

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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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