Perspective: Morning Commentary for August 18

By: Arlan Suderman, Chief Commodities Economist

Thu, 18 Aug 2022, 13:31

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

August 18 – Stock futures pushed quietly higher overnight ahead of this morning’s weekly jobs data, and they are now trying to defend those gains following the data release, while also digesting the minutes of the latest Federal Reserve meeting that were released on Wednesday. The VIX continues to consolidate near 20 this morning, while the dollar index is trading near 106.7. Yields on 10-year Treasuries are trading near 2.87% this morning, with yields on 2-year Treasuries trading near 3.24%. Crude oil prices are 1% higher as they consolidate below $90 per barrel, while RBOB gasoline prices are consolidating below $3.00 per gallon. Grain and oilseed prices slid modestly weaker overnight.

First-time claims for unemployment benefits slipped to 250K in the week ending August 13, falling below analyst expectations of 265K. The previous week’s total was revised to 252K claims, down 10K from what was reported last week. This puts the four-week moving average at 246.75K, down from 252K the previous week. Continuing claims rose another 7K in the week ending August 6, rising to 1.437 million. That’s still just above historical lows, but the trend is rising. A softening jobs market is one of the factors that needs to happen in order to ease wage inflation pressures that are contributing to the overall inflation numbers, although few policymakers want to discuss that.

The Philadelphia Fed manufacturing index for August is 6.2, up from a minus 12.3 the previous month, and better than analyst expectations that it would come in at minus 5. A number above zero indicates growth, while a number below zero indicates contraction. Analysts were holding their breath on this one after the Empire State index showed sharp contraction this month. There was little in this report to suggest strength for the Philadelphia district, but the data did suggest that the region is starting to see some stability, with 28% of the surveyed firms reporting rising employment, while just 4% reported lower employment.

The Federal Open Market Committee released the minutes of its late July meeting Wednesday afternoon, providing a bit of a wake-up call for the markets. Conversation in the Fed policy meeting room centered around the fact that policymakers still saw few if any signs that inflation had abated. Treasury yields rallied following the release of the minutes on expectations that the Fed would maintain its aggressive hawkish sentiment a bit longer. Fed fund futures trading continues to discount the Fed’s ability to sustain a hawkish bent, but policymakers have done so for the past several meetings, with some indications they may continue to do so a bit longer. The Fed finally appears to understand the risks of allowing high inflation to become engrained in the economy, and it appears bent on tackling the problem. We’ve never been able to do so without achieving positive real interest rates – rates that rise above the pace of inflation. We are no where close to doing that yet. However, we also have yet to see the impact on interest rates from shrinking the balance sheet – removing stimulus from the economy. The Fed is really just getting started with that, with M2 money supply still near record levels, and currency in circulation still essentially at record levels. The cash is still in the system. People are adjusting, and they are spending. They don’t like it, but they are doing so. The break in gasoline prices last month brought demand roaring back, which is likely to result in a resurgence of prices at the pump once the government reverses its policy of dumping oil from our Strategic Petroleum Reserve on November 1^st and starts pumping it back into the reserve at a faster pace than its been releasing it.

Severe drought brought water levels to record lows this month in China’s Yangtze River Valley. Crop damage is currently occurring over 1.6 million acres of land, including rice, corn, and various other crops. Hydro-electric power is reduced, resulting in fertilizer and soybean crush facilities being shut down. This is a major crisis in central China, but its overall impact on China’s crop production is still limited at this point. Nonetheless, this morning’s USDA weekly export sales report indicates a pickup of Chinese buying of U.S. corn and soybeans. I see this more as hedging their bets against the possibility of tightening global balance sheets than I do a reflection of immediate need. Yes, China needs to do a lot of purchasing yet for fall delivery, but it’s overall demand remains soft, relative to normal. Tensions between China and the United States continue to escalate as well, with the United States ratcheting those higher again with an announcement that it will engage in trade talks with Taiwan. Near-term, the focus is still on the U.S. corn and soybean crops finishing with a broad drier weather pattern, albeit in the absence of heat. Traders will be closely following reports from the field next week when the Midwest Crop Tour spreads across the Ag Belt, with social media full of reports and pictures from the field.

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 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

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

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

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

Perspective: Mid-Day Commentary for August 10

August 10 - Stocks traded quietly mixed to weaker through much of the morning as investors weigh Middle East war / peace headlines with artificial intelligence concerns / opportunities. Ironically, the VIX is trading near 15, putting it just barely above 2026 lows, despite the high level of geopolitical risks and AI concerns. The dollar index continues to consolidate largely between 99.5 and 100.0 after the late July break in what appeared to be Japanese central bank currency intervention. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.24%. WTI crude oil is trading near $81 at this hour, while Brent trades near $87 per barrel on the geopolitical risks. The grain and oilseed markets are mixed ahead of Wednesday's big USDA WASDE crop report.

Arlan SudermanMon, 10 Aug 2026, 17:02

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.