Perspective: Morning Commentary December 17

By: Arlan Suderman, Chief Commodities Economist

Wed, 17 Dec 2025, 14:26

Guest Commentary by Mike Castle

Lead Market Intelligence Project Manager

December 17 – Stock futures are pointing to a quietly higher open after a mixed finish yesterday, with economic data rather sparse today before picking up again tomorrow and into Friday. Fed Governor Christopher Waller pleased the doves with his comments this morning, pointing to a softening labor market and warning there could be more downward revisions ahead, while being quoted as saying we’re still “50 to 100 basis points off neutral” and that the Fed can “steadily, kind of bring the policy rate down towards neutral.” We will hear from two more Fed members (Williams and Bostic) later today, with traders keeping a close eye on their remarks to help shape their expectations for U.S. monetary policy moving into 2026. This has the VIX looking at a quiet start as well, falling to 16.2 at the time of writing. The dollar is attempting to erase its early week losses, up just over 0.2% on the session as it trades above the 98.4 level. Treasuries are up slightly as well, with 10-year yields trading above 4.16% and 2-year yields trading just below 3.50%. The ags are quietly mixed, with low volume holiday trade setting in amid a lack of fresh fundamental updates.

The U.S. has ordered a blockade of all sanctioned oil tankers entering and exiting Venezuela, per President Trump’s announcement yesterday evening. This is the latest escalation of pressure being placed on Venezuelan President Nicolas Maduro, following the ongoing build-up of U.S. military equipment in the region and last week’s seizure of a sanctioned oil tanker off the Venezuelan coast. The news has given a slight spark to the crude oil market, driving a ~2% rebound this morning after seeing WTI crude hit its lowest level since 2021 below the $55/barrel mark yesterday. Given the heavy global supply situation on the front-end, with millions of barrels of oil on tankers currently waiting off the coast of China to unload, the market reaction to a potential reduction in Venezuelan exports has been muted thus far. The market is also likely waiting for more certainty to price in a full reaction, with questions remaining over how strictly this blockade will be enforced, how long it will last, if this could eventually spill over to more of the world’s “shadow fleet” tankers more broadly, if tensions between the U.S. and Venezuela will escalate into something larger, etc.

It’s also worth keeping in mind that China is the top buyer of Venezuelan crude oil, meaning they could be the buyer most affected by such a blockade. Although we’ve seen a notable improvement in U.S./China relations in recent months, these geopolitical tensions are still lingering, and the U.S. is wary of growing Chinese influence in Latin America. Fresh dispute over Panama Canal ports is a perfect example of this, with the Chinese government reportedly pushing for state-owned COSCO to get a controlling stake in the $22.8B deal struck earlier this year by a consortium led by BlackRock and MSC. The consortium had reportedly previously been open to offering COSCO an equal stake, but the new push by the Chinese government for a majority stake is likely to draw the ire of the U.S. administration, as this would be contrary to U.S. interests. So, while today’s focus is on deciphering what will happen between the U.S. and Venezuela, don’t lose sight of the bigger picture, as increased tensions in the Americas could have broader global spillover effects given the country’s ties to China, Russia, and others.

Overall mortgage applications in the U.S. fell 3.8% week-on-week in the week ending 12/12, reversing course from the 4.8% jump in the week prior and marking the biggest decline since mid-November. This was driven by a combination of a 3.6% drop in refinancing applications and a 2.8% drop in new purchase applications. Meanwhile, the average 30-year mortgage rate rose to 6.38%, a three-week high, though still relatively low compared to the last few years. We’ll get more insight into the U.S. housing market with November existing home sales data due to be released on Friday. Home sales have been relatively soft in 2025 when compared to the surge seen in the early 2020’s, though the last release (October) saw existing home sales reach an eight-month high.

The EPA is not expected to finalize 2026 and 2027 biofuel blending mandates until the first quarter of 2026, keeping present some level of uncertainty for the near future. The below graphic attempts to provide an illustration of why this decision (and any policy matters pertaining to biofuels more broadly) is becoming more important for U.S. soybean fundamentals moving forward. USDA expects domestic soybean crush to reach 2.550 billion bushels in the ‘25/’26 marketing year, a 4.5% year-over-year increase and easily a fresh all-time high. Given the strength seen in realized crush data thus far (cumulative NOPA crush +12.5% year-over-year in the first three months of the marketing year), this target feels attainable, but the biggest risk still boils down to policy support.

With the longer-term trend of the U.S. losing export market share to cheaper South American supply, sped up by tensions with China, more importance lies on healthy domestic demand. USDA’s current soybean export target of 1.635 billion bushels (which may well be overstated as it is) is already the lowest seen since 2012, with the percentage of total U.S. soybean demand going to exports (38.0%) the lowest share seen since 2007. On the flip side, crush is now accounting for nearly 60% of total U.S. soybean demand, highlighting the importance of policy support expressed above. Throw in the fact that South American soybean production is expected to be record high for the third consecutive year with no plans for slowdown in sight, and this looks like a trend that should be expected to continue moving forward.

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Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

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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Morning Grain Comments 8-4

Morning Grain Market Comments - Matt Zeller

Matt ZellerTue, 04 Aug 2026, 11:55

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