Perspective: Mid-Day Commentary for July 6

By: Arlan Suderman, Chief Commodities Economist

Wed, 06 Jul 2022, 16:07

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

July 6 - The footing remains unstable on Wall Street, making a recovery bounce difficult for the time being. Both stocks and commodities have largely traded both sides of unchanged as the market assesses the situation. Traders hope to get some direction from the scheduled release of the minutes of the June Federal Reserve meeting this afternoon. This morning's Purchasing Managers and ISM services data both showed modest growth in the economy, while the JOLTS report showed posted job openings still very high at 11.25 million. But the latter was data for May, and it's now July, and traders are worried that things have deteriorated since then. Even so, Friday's monthly jobs report is expected to show that the economy created another 270K jobs in June, with the unemployment rate staying very tight at 3.6%, while hourly earnings remain up 5.0% year-on-year. The VIX continues to trade near 28, reflecting elevated fear levels on Wall Street. the dollar index is trading near 107.2, reflecting today's fresh 19-year highs, while yields on 10-year Treasuries are trading near 2.90%. Crude oil prices are 3% lower, after starting the day in positive territory, while wheat prices are down 2 - 3%, after starting the day up 3%. The bulk of the commodity sector saw this reversal of early gains to midday losses, while the protein sector has been the noted exception.

Tuesday afternoon's USDA weekly crop progress report, delayed a day due to the Independence Day holiday, showed ongoing deterioration in the crops. But that had no more impact on the markets than did last week's bullish soybean acreage number. Nonetheless, it's something that the market will eventually need to consider. Certainly, the rains received last night are expected with additional rains over the next several days to provide relief for much of the Midwest. As such, we should see some stabilization of condition ratings in next Monday's report if the forecasts verify. Otherwise, last night's rains were in a very narrow band that left many areas still wanting for moisture. The pattern dries out for the Midwest after this week, but the temperatures moderate considerably as well. The lower temperatures will slow crop development, but also ease any stress that otherwise might be expected from the anticipated return to drier conditions.

The graphic below shows this week's corn condition index score at 364 (500=perfect crop), down from 369 the previous week and down from 380 the previous month. The graphic shows this week's score versus the score of each crop in this same week over the past 35 years that USDA has posted crop ratings. This week's score is the third lowest of the past 10 years for the first week of July, and below the 10-year average for the week of 371 - although not notably lower. This translates into a seasonally adjusted yield of 175.1 bushels per acre, down 2.1 bushels on the week, and roughly 2 bushels below USDA's current estimate. I expect USDA to hold its yield at 177.0 bushels per acre in next week's WASDE crop report, but we'll need to see crop ratings stabilize to boost that yield closer to 177 in future weeks. A 175 bpa yield drops anticipated 22/23 ending stocks to 1.25 billion bushels or just an 8.5% stocks to use ratio on my balance sheet. The soybean condition index score is 361 this week, down from 365 the previous week and down from 375 the previous month. However, the 10-year average for the week is very close at 363. As such, my yield model currently puts the crop at a seasonally adjusted 52.1 bushels per acre, which is just above USDA's estimate of 51.5 bushels per acre. The critical period for these crops will be the last half of July and first half of August as they go through their critical reproductive phases.

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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.

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Mike CastleThu, 06 Aug 2026, 13:24

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August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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