Perspective: Morning Commentary for April 13

By: Arlan Suderman, Chief Commodities Economist

Thu, 13 Apr 2023, 13:21

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 13 – Inflation and the Federal Reserve remain the primary focus as we head into another day on Wall Street, with traders generally upbeat about what they saw in this morning’s producer price index data, while remaining skeptical of the Fed following the release of its latest set of meeting minutes on Wednesday afternoon. The VIX is trading below 19 this morning, reflecting a net optimism on Wall Street following this morning’s data release, while the dollar index is trading lower near 101.0. That represents a fresh 10-week low for the dollar. Yields on 10-year Treasuries are trading lower near 3.38% at this hour, while yields on 2-year Treasuries are trading near 3.92%. Crude oil prices pulled back modestly from yesterday’s nearly five-month high as the lead contract approaches the 200-day moving average. Grain and oilseed prices were mixed in overnight trade.

The producer price index fell 0.5% month-on-month in March, after falling 0.1% in February. Analysts had expected the PPI to remain flat in March. The PPI was up just 2.7% year-on-year in March, down from 4.6% the previous month. Core PPI that excludes the more volatile food and energy sectors fell 0.1% month-on-month in March, after being flat in February. Analysts had been looking for an increase of 0.3%. Core PPI was up 3.4% year-on-year in March, down from 4.4% in February. These are very good numbers, or at least an impressive move in the right direction. The PPI is a measure of prices received by producers of goods and services. This suggests that they were able to contain price increases in March, and even cut prices in some cases, partially due to declining commodity prices and partially due to fears over consumer demand as the economy slows. Today’s data is a positive for future consumer inflation data, although other factors also go into the CPI.

First-time claims for unemployment benefits rose to 239K in the week ending April 8, up from 228K the previous week and above analyst expectations of 233K. This pushed the four-week moving average to 240K claims, up from 237.75K the previous week. Continuing claims for the week ending April 1 fell 13K to 1.810 million. These numbers are modestly higher from where they were a month ago, but much of that is due to the government changing how it calculates seasonal adjustments a couple of weeks ago. I would call these numbers neutral to friendly for Fed policy changes.

The Federal Reserve provided insight into the complex discussions taking place within the board room during its March policy meeting on Wednesday afternoon. The minutes made it clear that the discussions led to several policymakers changing their positions at the meeting. On the one hand, Fed members were worried about data showing sticky inflation that remained worrisome to them, with several entering the meeting considering a 50-basis-point rate hike. On the other hand, policymakers were concerned about the recent failure of Silicon Valley Bank and Signature Bank, and the resulting fallout for the banking industry. Several members considered a pause in rate hikes to provide time to see how tools implemented by the central bank would help to stabilize the sector. But in the end, policymakers decided that those tools appeared to have stabilized the banking industry enough to focus on tackling what they considered to be the greater threat – inflation.

Look at this in light of what many Fed members have also said in recent weeks – that they don’t want to make the same mistake that the central bank made in 1980. The Fed felt the pain of its interest rate hikes in early 1980, and it succumbed to pressure to ease that pain by pivoting its policy in March of that year, feeling like it had seen enough turn in inflation to justify the flip in policy. However, inflation took an even stronger foothold when it did so, with consumers rapidly jumping back in to take advantage of the lower rates to increase spending. That necessitated an even stronger push in rates upward toward 22% by late 1980 in order to finally get inflation under control. Policymakers are bent on erroring on keeping rates too high too long if necessary to be sure they don’t make that mistake. That tells me that another 25-basis point rate hike is likely in May. That will finally push the Fed rate above the headline inflation rate, although rising energy prices may push that headline rate higher again in the next 30 to 60 days. Nonetheless, I do not expect a cut in rates for some time as the Fed tries to make sure that inflation is tamed for good, or at least until the next cycle.

China is preparing for war against Taiwan, according to Taiwan’s foreign minister Joseph Wu. Whether that’s imminently true or not is difficult to tell. I certainly believe that China will take definitive steps at some point in the future to control Taiwan, and there are certainly signs that the date is much closer now than most thought a few months ago. But it’s difficult to discern how imminent it is. China would prefer the delay game, for time is likely on its side. However, recent developments suggest that China feels that it is being pushed toward action. Bull-spreading continues to be the feature for corn and soybeans, with nearby stocks tight and production prospects for new crop rising, even as global geopolitical risks rise. Falling wheat prices indicate that Black Sea worries are easing again for now, until the next headline comes across.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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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

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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

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