Perspective: Morning Commentary for April 3

By: Arlan Suderman, Chief Commodities Economist

Mon, 03 Apr 2023, 13:23

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 3 – Stock futures were mixed overnight while commodities rallied as Wall Street’s focused shifted to a surprise cut in output from OPEC+ that spurred inflation talk once again, just as traders started growing more comfortable with the possibility of a soft landing for the economy. The dollar index is trading near 102.4 at this hour, after initially spiking on the OPEC+ news. Yields on 10-year Treasuries are trading near 3.50%, while yields on 2-year Treasuries are trading near 4.11%. Both are now off their session highs that were created by revived inflation fears. Money flowed into the broader commodity complex overnight, with WTI crude oil gapping to nine-week highs above $80 on the OPEC+ announcement. Grain and oilseed prices pushed higher as fund managers sought to increase their ownership on an inflation play, as well as following through on Friday’s post-report rally.

Crude oil prices could push back towards $100 per barrel, according to some analysts in the industry, following a surprise announcement by OPEC+ that its members will cut output by another 1.16 million barrels per day. More than half of the cut comes from Saudi Arabia, as it shows its hand in the price manipulation effort. That brings total output cuts since November to 3.66 million barrels per day, raising fears of tightness in supplies, and raising speculation that the cartel wants to see prices in the $90 to $100 per barrel range. In essence, today’s move reflects a line being drawn in the sand between OPEC+ nations that includes Russia and that have strong ties to China on one side, and the West on the other side. The cuts come amid projections that China will import a record quantity of crude oil this year as it comes out of Covid restrictions and lockdowns, while demand in the United States could surprise as well if the economy manages a soft landing. Brent crude oil prices surged by more than 7.5% overnight on the announcement, before profit taking pulled prices back after they hit significant chart objectives.

Declining energy prices accounted for a significant portion of the easing inflation pressures in recent months. Inflation in the service sector continues to grow, due to its dependency on a tight labor supply, but those pressures have largely been offset by declines in energy prices. I’ve previously warned about becoming too complacent about inflation in an environment where energy prices could rebound – and do so quickly – before wage inflation has been tamed. That’s currently the fear this morning following the surprise announcement by OPEC+. The 10-year correlation between our StoneX Commodity Index and the five-year breakeven inflation rate fluctuates north of 0.80, which is a relatively strong correlation. Today is only the first day of the announcement, so we’ll need to monitor market expectations to see if we see follow through increases in market expectations of higher inflation going forward. We tend to see an increase in money flow into the broader commodities when the market’s focus is on inflation, and it flows out when the market’s focus is on recession and declining inflation. The latter has been the case for much of the past year. Fund managers look at supply and demand fundamentals through a different colored lens when they’re focused on inflation than when they are focused on recession risks. Fed fund futures reflected roughly even odds of seeing another rate hike at the Federal Reserve’s May meeting on Friday, but those odds topped 60% earlier today.

The Chinese army conducted intensive air and sea drills in the East China Sea over the weekend, while also commissioning new weapons and equipment. The activity was to serve as a warning to Taiwan and to the United States ahead of an expected meeting between Taiwan’s president and U.S. House Speaker Kevin McCarthy in California this week. Beijing is expected to resolutely respond to any actions that it believes are intended to encourage Taiwan independence, which it sees as a threat to its national security. A local expert speaking anonymously stated that the People’s Liberation Army is ready to safeguard national sovereignty firmly. Beijing shows no indication that it will downplay the consequences of the expected meeting, leading to increased geopolitical risks in the week ahead.

Today’s OPEC+ announcement combines with Friday’s set of USDA reports to support a positive start to the week and to the month for the grain and oilseed sector. Wall Street is looking at supply and demand fundamentals through an inflation lens – at least to start things off this morning. USDA’s surprise stocks numbers on Friday showing smaller-than-expected corn and soybean supplies fit that narrative as well. That’s also true for the smaller-than-expected soybean acreage. One could argue that the larger-than-expected corn acreage goes against that trend, but persistent wetness in the southern and eastern Corn Belt, combined with heavy snowpack in the northwestern belt, ease fears for now about excessive acreage. I wouldn’t say that I’m bullish corn and soybeans, but I am less bearish. Furthermore, my 2023-24 global wheat balance sheet continues to tighten, as does my domestic balance sheet for the year ahead. As such, I’m looking for U.S. wheat stocks in the coming marketing year to remain near current snug levels, with risks they could tighten further. I’m expecting U.S. corn and soybean stocks to grow modestly in the year ahead, although global risks leave them vulnerable if overseas production falls short of current expectations. The next 60 days will tell us a great deal.

Grains & Oilseeds
Base Metals
Precious Metals
Digital Assets
Energy
Dairy
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products
Currencies
Interest Rates

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.

The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.

References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.

StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.

StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.

This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.

StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.

StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).

SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.

StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.

StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.