Perspective: Morning Commentary for August 20

By: Arlan Suderman, Chief Commodities Economist

Wed, 20 Aug 2025, 13:29

August 20 – Stocks again had a weaker tone overnight, with the tech sector leading the weakness. Retail earnings reports have sent a mixed message about the economy, while the tech sector faces its own set of challenges regarding exports to China. The Federal Reserve is expected to release the minutes of its July policy meeting this afternoon, which could provide insight into whether there were more than the two dissenting voters who argued for rate cuts, or not. The VIX is trading near 16 this morning – still relatively low but slowly edging higher ahead of Friday’s highly anticipated speech by Federal Reserve Chair Jerome Powell from Jackson Hole, Wyoming. The dollar index is trading near 98.1 this morning. Yields on 10-year Treasuries are trading near 4.30%, while yields on 2-year Treasuries are trading near 3.75%. Crude oil prices are bouncing roughly 1% this morning, following their recent weakness, while the grain and oilseed complex was quietly mixed overnight.

Wall Street is fixated on the rate cut issue. It wants to see rate cuts from the Federal Reserve, and the more the merrier. It believes that Powell has enough justification in softening employment data to justify a rate cut at next month’s meeting, with one or two more rate cuts before the end of the year. But slowly rising inflation data keeps nagging doubts in place in whether Powell will make the move that President Trump has been pressuring him to do. He knows that he will not be able to stay in his seat as Chair of the Fed beyond May – Trump has made that clear. He doesn’t want to be seen as a political pawn that yields to political pressure. At the same time, he’s human, and he would like to ease the pressure before he loses the support of the other policymakers. Two of those policymakers voted against him in the July meeting – the first double-dissent at a Fed meeting since 1993 – one of which is a leading candidate to replace Powell. Wall Street traders hope that today’s Fed minutes will reveal that there are others about to flip their positions toward rate cuts as well. Policymakers in China will be watching this drama unfold as well. U.S. rate cuts would allow them to also move forward with stimulative rate cuts.

U.S. Treasury Secretary Scott Bessent told the media Tuesday that the White House is satisfied with the status quo with China. He also stated that the next round of trade talks with China will likely occur prior to November, but no dates have been set yet. The latest agreement to suspend high reciprocal and retaliatory tariffs between the two countries extends until November 10. That means that some type of an agreement is likely by then, but big agreements rarely happen much before a deadline as each use the deadline as leverage to get as much as they can out of the deal. While not publicly confirmed, industry sources indicate that the May 11 agreement to suspend tariffs included an agreement to allow rare earth minerals and magnets to flow from China to the U.S. auto industry for a six-month period in exchange for U.S. computer chips to flow to China. If true, that would suggest that rare earth minerals will be a priority for any agreement reached in November. Commodities could certainly be a part of such an agreement as well, but we don’t know that to be the case until they are. Meanwhile, China continues to largely source its commodity needs from elsewhere, other than pork purchases. The biggest impact has been on the U.S. soybean market, which sent nearly one out of five bushels of soybeans produced in 2024 to China. Thus far we have notice of zero bushels of the 2025 crop committed to China. Its window of opportunity for selling soybeans to China essentially closes in December, with buyers looking to cheaper new-crop Brazilian supplies beyond that point.

Unemployment among non-student young people aged 16 – 24 in China rose to 17.8% in July, up from 14.5% in in June. The unemployment rate among those aged 25 – 29 rose to 6.9% in July, up from 6.7% in June. This is a rising problem for China as it stands tall and strong against the Trump tariff war. Rising unemployment among its younger generation continues to contribute to a lower marriage rate. Marriage registrations fell 20% on the year in 2024. That then leads to a lower birth rate, since births outside of marriage are not allowed in China. This comes during China’s anti-involution campaign in which it is trying to reduce over production capacity in its manufacturing sector, which also tends to reduce workers. China’s state-run economy needs to create employment for these young workers to sustain its economy, so it is doing so thus far with massive infrastructure projects that increase government debt.

The Pro Farmer Midwest Crop Tour reported that the Nebraska tour routes saw an average corn yield of 179.5 bushels per acre, up from 173.2 the previous year, and above the three-year average of 166.3 bpa. Soybean pod counts totaled 1,348, up from 1,172 the previous year, and above the three-year average of 1,132 pods. Indiana’s average corn yield came in at 193.8 bpa, up from 187.5 bpa last year and above the three-year average of 182.1 bpa. Soybean pod counts averaged 1,377, down from 1,409 last year, but up from the three-year average of 1,295. Today’s tour will focus on Iowa, moving into southern Minnesota to wrap things up tomorrow. They should see their best crops of the tour today and tomorrow. The tour traditionally understates USDA final yields.

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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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