Perspective: Morning Commentary December 31

By: Arlan Suderman, Chief Commodities Economist

Wed, 31 Dec 2025, 14:37

Today's Perspective Video: Taiwan Showdown: Crisis Averted or Commodity Market Risk Ahead?

December 31 – 2025 comes to an end today. The markets will be closed for the New Year’s Holiday tomorrow, returning to wrap up the week in what will likely be another thinly traded session on Friday. It’s been a very tumultuous year, but you wouldn’t necessarily know it by looking at the stock market. Stock futures came under modest pressure overnight, but they were generally firming as we approached today’s opening bell. The VIX is trading just above 14.5 this morning, while the dollar index is trading near 98.3. Yields on 10-year Treasuries are trading near 4.15%, while yields on 2-year Treasuries are trading near 3.47% as the yield curve slowly steepens. Crude oil prices were modestly higher this morning, while the grain and oilseed sector traded mostly lower.

First-time claims for jobless benefits fell to 199K in the week ending December 27, down from 215K the previous week, and below analyst expectations of 218K. Yet, the four-week moving average crept slightly higher to 218.75K claims, up from 217K the previous week. Continuing claims for the week ending December 20 fell to 1.866 million, down 47K from the previous week, which was also revised lower by 10K. The four-week moving average dropped by 17,750 to 1.874 million. Initial claims filed by former Federal civilian employees totaled 812 in the week ending December 20, up 7 from the previous week. Continuing claims filed by former Federal civilian employees in the week ending December 13 totaled 13,390, up 503 from the previous week. Overall, these are good numbers, especially with the continuing claims numbers showing a significant drop, although we’ll need to see how that trend holds as we go into the new calendar year.

The S&P 500 stock index starts trade today up 12.8% year-to-date as we prepare to close out the year today, while the Nasdaq 100 is up 15.9% and the Dow Jones Industrial Average is up 9.9%. Not bad for a year in which many “experts” worried that we would head into a recession. Remember when the yield curve inverted in the summer of 2022? Those same “experts” were confident that we were going into a recession, and it never happened. Many of those same “experts” predicted the same on “Liberation Day,” but again it never happened. To be sure, our economy averaged a recession every six to seven years over the past 75 years, with 13 recessions since the end of World War II. The average length of a recession over that period of time was 10 to 11 months. Our most recent recession was short and brief, and man created, during the pandemic of 2020. The last true recession that we’ve experienced in the United States was the Great Recession of December 2007 to June 2009.

The strongest performers in the commodity world in 2025 start with silver, which sits 128.8% higher today than where it started the year, according to Finviz, followed by platinum up 108.2%, Palladium up 70.3%, and gold up 54.8%. These metals have been bolstered by a combination of increased demand for green energy, the explosion of AI use, and increased central bank purchases of gold as geopolitical tensions increased. Copper prices were close behind, up 31.3% year to date. Next, you need to look to the protein sector. Protein supplies tightened further this year as the impact of a smaller cow herd in the States was felt, combined with a rise of relatively inelastic demand for meat in the American diet, aided by the increased adoption of GLP weight loss drugs. Feeder cattle prices are up 35.1% from where they started the year, while live cattle futures are up 27.0%, and lean hogs gained 17.3%. Soybean oil prices are up 15.7%, but well off their highs for the year as the industry continues to wait for the U.S. Environmental Protection Agency to complete its biofuel regulations for 2026 & 2027. Heating oil prices are up 10.9% on the year, but crude oil prices are down 10.1%. Soybean prices are down 2.4%, while corn prices are down 13.6%, cotton prices are down 13.0%, and wheat prices are down 19.4%. The big loser of the year was orange juice, which starts trade today down 57.3% on the year, followed by cocoa, which is down 41.8% and rough rice down 35.5%. Lumber prices for building that new home are down 23.5%, although you wouldn’t know it looking at the price of new homes today.

Our StoneX commodity tracker shows the strongest 10-year correlation with the consumer price index to be the grain and oilseed sector at 0.88, followed by the energy sector at 0.84. Historically, the money tends to flow in or out of these sectors based on market perceptions of where inflation is headed. Despite the headlines, the market currently is trading expectations of lower inflation over the next couple of years, with the US 2-Year Breakeven Inflation Rate falling below 2.3% for the first time since the fourth quarter of 2024. Both the grain and oilseeds, as well as the crude oil market, are well supplied currently, providing a negative fundamental bias, but the lower inflation expectations have generally led to a negative bias from the money flow part of the market as well to close out 2025. The question is, will that change as we head into 2026? Will we see increased economic activity as the incentives of the “One Big Beautiful Bill” kick in? I’ll take a deeper look at 2026 on Friday as we start the new year.

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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.

Mike CastleFri, 07 Aug 2026, 13:26

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Mid-Day Commentary for August 5

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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