Perspective: Mid-Day Commentary for December 15

By: Arlan Suderman, Chief Commodities Economist

Fri, 15 Dec 2023, 17:14

Perspective: Mid-Day Commentary

Arlan Suderman

Chief Commodities Economist

December 15 - It's a quiet day following a volatile week on Wall Street as a statement by the New York Fed President brought a bit of reality to the markets about the possibility of near-term rate cuts. The VIX is trading near 12, while the dollar index bounced to trade near 102.5. Yields on 10-year Treasuries are trading near 3.92%, while yields on 2-year Treasuries are trading near 4.41%. Crude oil prices are mixed, which is true for the grain and oilseed sector as well, with prices consolidating following recent market volatility.

The Biden Administration handed down its anticipated decision in support of Ag based biofuels this morning, announcing that it will recognize a methodology favored by both the ethanol and the edible oils industries in determining the value of utilizing ethanol, as well as soy and canola based oils as a feedstock for sustainable aviation fuel production. The Administration chose to recognize the Department of Energy's Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model that enables ethanol-based SAF to qualify for more tax credits under the Inflation Reduction Act. By doing so, it also supported the use of the edible oils based feedstocks as well. The airlines had argued that adoption of the GREET model was essential to make sure they had enough SAF volume to meet demand, while environmental groups and the fossil fuel industry had argued for adoption of the older U.N. model that emphasized the assumption of higher production reduces rain forests. However, the industry won't celebrate until they see the technical details worked out, which the Administration promises to be complete by March. Ethanol is the clear winner if those details fall in line, but the better scoring scheme should benefit edible oil demand as well, giving Ag a big boost in an election year.

Much focus was given to heat and drought stress in Center-West Brazil this year, and the anticipated impact on the market due to lower production in the region. USDA lowered its production estimate for Brazil to 161 million metric tons last week, down from 163 mmt previously. Our StoneX Brazil customer survey put the crop at 161.9 mmt on December 1, down from 165.0 mmt previously. Those numbers will likely continue to fall, but why hasn't the market reflected that more than it has? Part of the answer to that question is on the supply side of the balance sheet, and part of it is on the demand side. As for supply, keep in mind that Argentine production is expected to double this year as three years of drought come to an end, with hopes of improved fiscal policy as well. That has combined production in Argentina and Brazil still up 24 mmt from the previous year, even after USDA's recent downward revisions, as shown in the chart below. On the demand side, global demand had flattened in recent years near 364 mmt. USDA suddenly bumped that by nearly 20 mmt when it appeared that global production would surge this year. Increases in domestic consumption in Argentina (5 mmt) and U.S. (3 mmt) can be justified, but it's more difficult to do that for Brazil and China. USDA's demand estimates are likely to come down as production estimates come down, softening the effect of Brazil weather.

Grains & Oilseeds

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

Grains & Oilseeds
Energy
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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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