Perspective: Morning Commentary for April 26

By: Arlan Suderman, Chief Commodities Economist

Wed, 26 Apr 2023, 13:35

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 26 – A favorable earnings report from Microsoft provided support for the tech sector this morning, but Wall Street remains focused on this week’s data ahead of next week’s Federal Reserve meeting. The VIX is trading near 19 this morning following yesterday’s sharp losses in stocks, while the dollar index is trading near 101.3. Yields on 10-year Treasuries are trading near 3.39%, while yields on 2-year Treasuries are trading near 3.88% on recession fears. Crude oil prices are nearly 1% lower in early trade, after hitting their lowest levels since March 31st on recession worries. The grain and oilseed sector traded mixed to higher overnight in quiet trade.

Durable goods orders rose 3.2% month-on-month in March, more than tripling analyst expectations of 0.9% growth and a reversal of the 1.2% decline seen in February. However, much of that was due to transportation orders. Durable goods orders minus transportation rose 0.3% month-on-month in March, beating expectations that they would decline by 0.2%. February durable goods orders were revised to a 0.3% month-on-month decline, after originally being reported as flat. Core capital goods orders, which tends to reflect the health of the business sector, fell 0.4% month-on-month in March, versus analyst expectations that they would grow by 0.2%. The February number was also revised lower to a contraction of 0.7%, after originally being reported as 0.2% growth. As such, the headline number reflected transportation orders that skewed the overall numbers. Durable goods orders minus transportation still out-performed expectations, but the core numbers suggest ongoing problems in the business community that remains fearful of future recession problems.

Retail inventories rose 0.7% month-on-month in March, according to today’s advanced readings of the data. The February data was revised to 0.3% growth in retail inventories, down from the 0.8% originally reported. Wholesale inventories rose 0.1% month-on-month in March, matching the previous month’s pace, but down from analyst expectations of 0.2%. Inventories tend to grow for one of two reasons, and the growth was most noticeable in the retail sector in March. One reason for growth would be if retailers are optimistic about futures sales and want to get inventory into position ahead of the demand. The second reason for inventory growth would be if sales are falling below expectations, leaving goods accumulating on the store shelf. The core durable goods orders data above would suggest that the business community is not very optimistic about future sales, especially with consumer sentiment at such low levels, suggesting that inventory is rising due to slow sales.

China aggressively bought Brazilian soybeans for import last week, committing to about 45 cargoes during the period as active farmer selling continues to push cash basis weaker amid this year’s massive harvest in Brazil. The normal weekly purchase pace is 20 to 30 cargoes per week, so last week’s activity certainly stood out at a time when crush margins have not been good in China. Most of the purchases were of Brazilian origin for loading in May and June, with arrival at Chinese ports 45 days later. The cheapest purchased soybeans were booked at 60 cents under Chicago July futures for June shipment landing in China. Our cash sources in China suggest that China has booked 10 million metric tons of soybeans for April shipments, up 16% year-on-year, with May shipments expected to be up 32% over the previous year’s pace. Chinese bookings for the first quarter of this year were around 26 mmt, according to today’s edition of China Direct, published by our Shanghai office, up 3 mmt, or 14% from the previous year. This is consistent with my expectations that Chinese imports would exceed USDA’s expectations this year, as China takes advantage of Brazil’s big crops to build its reserves. China traditionally only took reserve soybeans from Argentina and from the United States, but this suggests a change in policy, although such cannot be confirmed. There are unconfirmed rumors in China that it will add 5 mmt to its reserves this year. We saw China pull from its reserves a year ago to avoid buying more than it needed from the United States while waiting for the Brazilian crop.

Portions of the southwestern Plains saw their biggest rain event since July over the past 24 hours. The rain was welcomed, although it came too late for many wheat fields in the area that had already failed. If anything, the rains may do more to encourage the planting of spring crops in the days ahead. More rains are falling in the region today. The region dries out again following this event, although the longer-term forecast models continue to hold out hope that we will see more chances for rain later in the spring into the summer. Meanwhile, the markets are now waiting for a response from Russia after the United Nations sent a proposal for extending the Ukraine grain initiative to President Putin through diplomatic channels. For now, the overnight bounce appears to be just that – a bounce.

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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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