Perspective: Morning Commentary for August 22

By: Arlan Suderman, Chief Commodities Economist

Fri, 22 Aug 2025, 13:20

Today's Perspective Video: Big Crops Get Smaller

August 22 – It’s Fed Day on the Street. No, the Federal Open Market Committee is not meeting to change its monetary policy, but Fed Chair Jerome Powell will be speaking before policymakers, journalists, academics and others in Jackson Hole, Wyoming at 8 a.m. Mountain Time. That could very well set the tone going forward. The VIX is trading near 16 this morning, while the dollar index is trading near 98.7. Yields on 10-year Treasuries are trading near 4.32%, while yields on 2-year Treasuries are trading near 3.79%. Crude oil prices traded quietly higher overnight, while the grain and oilseed markets were mixed.

Fed Chair Jerome Powell has the focus of the world this morning. He knows that President Trump will not allow him to serve as chair of the central bank beyond the expiration of his term in May. He knows that the president has maligned him in the public sector many times, and he has held strong against the storm. This will be his last opportunity to address central bankers at the annual Jackson Hole Symposium. He is expected to use his final platform opportunity at the symposium to unfold the new policy framework developed by staffers for shaping future monetary policy. The new framework is expected to take a different approach to the relationship between inflation and the employment sector, putting more focus on controlling inflation, even though Powell put his emphasis on employment at the recent July meeting. Doing so led Wall Street to believe that a September rate cut was imminent, particularly after a poor job report two days after Powell’s July meeting comments. However, yesterday’s PMI data could actually argue for a rate hike, particularly if the central bank is going to put more emphasis on inflation – believing that taming inflation will create a better environment for employment. To be clear, I have been a critic of the Fed’s focus on academic theory rather than real-world business focus in developing policy. But I do not support political influence on the Fed. Many presidents of both parties have done so, as most would prefer low interest rates that stimulate growth during their tenure. I do want to see change at the Fed, but I also want independence in policy development that is grounded in solid proven business principles.

China and India are moving toward one another, rather than apart, as President Trump had hoped. They’ve agreed to increased trade, with urea fertilizer expected to flow once again from China to India. That has implications for the fertilizer market, but the bottom line is that India is moving away from the West currently, rather than toward it in Trump’s attempt to isolate China. The world’s two most populous nations are strengthening ties at the expense of the United States. President Trump’s tariffs have proven to be an effective negotiating tool with many key countries, but they appear to have backfired in this case. Peace in Ukraine could unwind the 50% tariff on India, but I believe that is one of the reasons that China will continue to influence Russian President Putin to continue the war.

Soybean oil futures surged on Thursday, contributing to strong gains in soybean futures as well. For context, soyoil prices had been trending lower off their July highs on worries over what the Environmental Protection Agency’s policy will be toward the 195 Small Refinery Exemption applications in front of it. The EPA is expected to rule on the SREs prior to releasing its final RVO blending requirements. The RVO recommendations were released earlier this summer, have gone through the comment period, and are now being prepared for final release at some point prior to the end of October. Rumors started circulating this week that the EPA would release some type of a ruling on the SREs sooner rather than later – perhaps as soon as today. Both Bloomberg and Reuters reported this week that they believed that an announcement could come as soon as today, or perhaps next Friday ahead of the Labor Day holiday. Unnamed sources for the stories indicated that the EPA probably would not rule on whether the SREs would be offset by an increase in blending requirements for larger refineries, but rather that several options could be provided by the EPA, along with a comment period to test industry responses to the potential options. Traders then took note that someone had purchased 1,000 option contracts for September 54-cent soyoil calls on Monday, spurring speculation about what someone might know? That created the surge of futures buying that we witnessed. Domestic soybean demand will be critical this year amid the current absence of Chinese buying.

The Pro Farmer Midwest Crop Tour wrapped up in southern Minnesota last night. It found very good crops in the western half of the Midwest. It found some problems in the east. Most disappointing though were the Illinois corn numbers, which will likely drag the national numbers lower if the tour results verify. Soybean yield potential remains good, but the market suggests that traders don’t expect it to be much bigger than what is already priced in, and it may be smaller. Look for Pro Farmer to release its official yield estimates this afternoon, with history suggesting they’ll be below USDA. The focus now is on strong corn demand, farmers selling rallies on both sides of the equator, and on the EPA’s SRE and RVO biofuel announcements, whenever they’re released.

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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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