Perspective: Morning Commentary for August 29

By: Arlan Suderman, Chief Commodities Economist

Fri, 29 Aug 2025, 13:35

August 29 – This morning’s Personal Consumption Data provided few surprises for Wall Street, although stock futures remained under modest pressure as we prepare to go into a three-day holiday weekend. The markets will be closed on Monday for the Labor Day holiday. The VIX is trading below 15 this morning, while the dollar index is trading near 98.1. Yields on 10-year Treasuries are trading near 4.23%, while yields on 2-year Treasuries are trading near 3.64%. Crude oil prices traded modestly weaker overnight, while the grain and oilseed markets had a mixed to lower tone as well.

Personal income rose 0.4% month-on-month in July, up from 0.3% in June, but matching analyst expectations. Personal consumption expenditures rose 0.5% month-on-month in July, up from an upwardly revised 0.4% in June, but matching analyst expectations. The PCE price index rose 0.2% month-on-month in July, down from 0.3% in June, but matching expectations. The PCE price index rose 2.6% year-on-year in July, matching the June level, and matching analyst expectations. The core PCE price index that excludes the more volatile food and energy sectors rose 0.3% month-on-month in July, matching the previous month’s pace, and matching expectations. The core PCE price index rose 2.9% year-on-year in July, up from 2.8% in June, but again matching expectations. The bottom line from the above data is that we saw very solid growth in personal income and consumer spending in July. The data showed some modest inflationary pressures from the tariffs, but overall inflation saw very little change. That is seen by Wall Street as more clearance for the Federal Reserve to cut its benchmark interest rate in a few weeks.

This is a big weekend for China. President Xi Jinping will host various world leaders to a high-profile event celebrating victory over the Japan in World War II. The schedule starts with diplomatic meetings on Saturday, before culminating with a big military parade this coming Wednesday in which China will put its full military assets on display. It should be noted that India’s Prime Minister Modi and Russian President Putin are scheduled to be in attendance, with the three of them expected to meet to discuss a united response to President Trump’s sanctions intended to force Russia to end its war against Ukraine.

President Trump announced widespread reciprocal tariffs against the nations of the world on April 2^nd, sending us into an era of uncertainty. Trump’s goal appeared to be one of establishing a baseline tariff on all trading partners that would create revenue for the Treasury Department for helping to balance our fiscal budget, while also using the tariffs to negotiate down higher tariffs and non-tariff barriers currently in place by other countries against the United States. One of the objectives of the Trump Administration since the start has also been to “contain China.” Many of the trade deals reached in recent months contained language intended to limit China’s ability to bypass sanctions – and to particularly limit its ability to pass goods through other countries to bypass U.S. sanctions and tariffs as it seeks to access the U.S. consumer. That was particularly expected to be the case for other Southeast Asian nations, as well as for Canada and Mexico. Wire service reports are now indicating that Mexico is moving a proposal through its Congress for approval that would raise tariffs on multiple Chinese goods, including cars, textiles, plastics and other goods. The proposal is designed to close a loophole that allows China to transship goods through Mexico to the United States, impacting more than $5 billion of Chinese exports annually. If approved, this should help to pave the way for a trade deal between the United States and Mexico. Mexico’s Congress is expected to vote on the proposal in September, as part of its budget plan.

We’ll turn the calendar to September over the three-day holiday weekend. USDA will be spreading across the country sampling fields to determine its September yield estimates, while also sending surveys to farmers as part of the yield-determining process as well. The market is convinced that we’ve seen the highest yield estimate of the year for corn, and possibly for soybeans as well. That’s been priced into the market already. The question now is, how far will yields pull back from the high levels reported as of August 1? Farmers from across the Midwest attended the Farm Progress Show in Decatur, Illinois this week, where I had the opportunity to visit with many of them. The sense was that we’ve pulled back from a phenomenal crop to “just” a big crop. However much yields pull back, this year’s crops are still expected to be big. Storage will be a problem for the cash market to work through, especially in the western Midwest in the absence of a rail bid to ship soybeans to the Pacific Northwest for shipment to China. Futures traders are moving past the crop size debate to focusing on demand. Fund managers believe that farmers will be forced to sell bushels at harvest that will let them out of their speculative short positions. Corn export demand remains strong, while soybean export demand continues to falter in the absence of Chinese buying. Biofuel demand should be good for soybeans, but not enough to offset lost Chinese business if China remains absent.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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