Perspective: Morning Commentary for April 4

By: Arlan Suderman, Chief Commodities Economist

Mon, 04 Apr 2022, 13:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 4 – Stock futures were mixed overnight, as Wall Street assesses the impact of the ongoing war in Ukraine that appears to be escalating, versus the lingering battle with inflation here in the States. The VIX is trading near 20 this morning, reflecting a relative complacency with both problems on Wall Street as the economy continues to prove resilient. The dollar index is trading near 98.8 this morning, while yields on 10-year Treasuries are trading near 2.39%. Crude oil prices are more than 3% higher, while the Ags were mostly higher as well, after money flowed into the broader commodity sector overnight.

Talk of peace in Ukraine raised the hopes of traders a week ago, but that was followed by an escalation of the war in the days that followed, leading to resignation that this war will likely linger on much longer than anyone would want to see happen. Russian troops pulled out of some areas around the capital city of Kyiv, as they regrouped to focus on other less populated areas to the east, but the pullback revealed the bodies of multiple civilians strewn along the streets – some of which appeared to have been executed. Others were found in mass graves. Russian troops are currently focusing their efforts on eastern regions of Ukraine, as well as on southern ports. The prize port of Odessa, which handles the bulk of Ukraine’s grain exports, remains in Ukrainian hands, but it was reportedly the target of a Russian air strike over the weekend.

Ukraine reports that it was able to export 1.1 million metric tons of corn in March, along with 309K tons of wheat and 118K tons of sunflower oil. Many of these exports traveled west over land, with ships unable to leave their ports due to the war. Port shipments were largely confined to a small group of previously loaded ships that were allowed to leave their berths last month to make room for Russian military ships. Some spring planting has begun in Ukraine; particularly in western areas further from the war. A local consultant reports that 327.3K hectares of spring barley are planted, along with 81K hectares of spring wheat, 50.1K hectares of peas, and 62.3K hectares of sunflowers. The consultancy remains optimistic that farmers will still be able to plant 13.438 million hectares of spring crops in areas currently under the control of Ukraine and not occupied by Russian troops, down 3.478 million hectares from last year, although we continue to believe that is optimistic. Winter grain plantings prior to the war totaled 7.7 million hectares, with 6.5 million of that being winter wheat and triticale.

APK-Inform reports that some winter wheat continues to be top-dressed with fertilizer, but that this year’s yields overall for winter and summer crops will be reduced due to a lack of fertilizer and other crop inputs. It expects total production of grain and oilseeds in Ukraine to reach 53.3 mmt, down 51% from the previous year, and we think that is optimistic. However, it’s important to note that APK-Inform emphasizes that its production estimates should be sufficient to meet domestic demand, with little mention of exportable supplies. Survival is the current focus for those in Ukraine, and that will continue to be the case if the war ends this week, which is not likely. The Russian destruction of infrastructure will take years to rebuild, and Russia is not yet done with its destructive behavior.

Chinese markets are closed today and tomorrow for the Ching Ming holiday, but millions of people remain in lockdown, unable to travel, and in many cases, unable to leave their homes. That reduces demand for fuel, along with the consumption of meat and other commodities, with restaurants closed. China reported a record high total of new locally transmitted asymptomatic Covid cases at 11,771 yesterday, including 8,581 in Shanghai, and 2,742 in Jilin. More than 52,000 people tested positive in March in Shanghai, which remains in a virtual lockdown, not counting the many positive tests in other cities. All citizens of Shanghai were required to do rapid antigen tests Sunday before citywide nucleic acid testing the following days. China used more than 10,000 military healthcare workers to assist with the testing.

Thursday’s USDA reports refocused the trade on the supply and demand fundamentals for corn and soybeans, as well as spring wheat. The market is now trying to influence a shift in planting intentions. Most notably, the global corn balance sheet is much tighter, with U.S. acreage down notably, Ukraine absent, and Brazil’s forecast shifting drier for pollination of the safrinha corn crop. My 2022-23 U.S. balance sheet drops corn stocks to a tight 988 million bushels, while soybeans rise to a more ample 453 million bushels. China has been absent from the U.S. corn market for much of the past year, focusing first on shipments from Ukraine, followed by shipments of purchases of U.S. corn made early last year. I’ve been watching for signs of panic among Chinese feed grain purchases due to the tightening global balance sheet. We’ve seen some purchases by “unknown destinations, but few if any specifically to China. That changed this morning when USDA’s daily flash sales announcement included 42.7 million bushels sold to China over the weekend, including 26.6 million for the current year, with the remainder for the next marketing year. China’s buying will make other buyers nervous as well.

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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.

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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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Morning Grain Comments 8-7

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