Perspective: Morning Commentary for August 30

By: Arlan Suderman, Chief Commodities Economist

Tue, 30 Aug 2022, 13:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

August 30 – Stock futures bounced overnight, following the sell-off initiated by comments made by Federal Reserve Chair Jerome Powell on Friday at the Jackson Hole Economic Symposium. Economic concerns remain high, along with inflation, while traders fret over the adverse impacts of a hawkish Fed policy designed to cure the inflation problem. However, any sense of panic eased overnight, allowing for the bounce in stock futures. The VIX eased back to trade below 26 this morning, while the dollar index slipped lower to trade near 108.6, after hitting two-decade highs on Monday. Yields on 10-year Treasuries are trading near 3.11%, while yields on 2-year Treasuries are trading near 3.45%. The broader energy and food-based commodities came under pressure overnight, with crude oil prices down by more than 3%, and the grain and oilseed sector seeing losses of more than 1.5%.

Powell essentially admitted on Friday that taming inflation will necessitate slowing the economy, while also cooling the jobs market. He was correct, for taming inflation means bringing supply and demand into better balance. But policymakers have been reluctant to say this in the past because it would infer responsibility for over-stimulating demand with previous policies. Yet, Powell came to the point of realization that Wall Street needed to hear the truth in order to trade reality. As such, the markets are now adjusting to that new reality. Fund managers are adjusting their investments to reflect expectations of slower economic growth – and maybe contraction – along with lower demand for commodities. The latter is more of a challenge for fund managers. People still eat in a recession, although there are some noted shifts between products. However, energy consumption does tend to go down. However, supply of some key food and energy commodities is also threatened, and we could see some cases where supply drops even more than demand, necessitating more price rationing. That’s what Wall Street is trying to figure out, along with producers, end users, and everyone else along the supply chain routes.

The date is set for China’s 20^th Congress to meet for the purpose of carrying out the business of the country, including re-electing President Xi Jinping for another four-year term in office. China’s Congress will meet on October 16^th. The two previous meetings of Congress each lasted six days. After all, how long does it take to vote the party line? This means that China’s zero-tolerance policy toward Covid-19 is expected to remain in place until at least the end of the mid-October meeting. It also means that China will not likely take definitive action on Taiwan ahead of the meeting of Congress, although it will likely continue to show a position of force and strength in support of nationalism. The next question then is, will China ease its zero-tolerance policy after the Congressional meeting? And will China take definitive action to “reunify” Taiwan in the window between the meeting of its Congress and the U.S. elections on November 8. Doing so in that window might put pressure on the Democratic Administration to show force in response to help its poll numbers, arguing against such a move. However, the Taiwan Straits start to become less friendly for military maneuvers after October, which argues for an earlier move. Regardless, this remains a potential black-swan event to monitor in the commodity space.

China bought 48 cargoes of soybeans in the week ending August 26, according to today’s edition of China Direct, published by our Shanghai office. That’s nearly twice the buying pace of the previous week, as crush picked up to 1.73 million metric tons, up from 1.65 mmt the previous week. The buying spree was believed to include 5 cargoes from Argentina and Brazil for September, which should bring September coverage to 90%. Another 32 cargoes were purchased for October and 2 for November – mainly from U.S. sources. That brings October coverage to 73% of anticipated needs, with November at 58%. China also purchased another 9 cargoes for the February to April time slot from the United States. It did all of this while USDA’s weekly export sales reporting system is down. USDA announced late Monday that the system is down indefinitely – until further notice. Today’s edition of China Direct also goes into more detail about both severe drought and extreme rainfall impacting various crop areas in China.

“Unknown destinations” bought another 9.7 million bushels of new-crop soybeans overnight, according to USDA’s daily flash reporting system. The news provides a spurt of positive news in a week when fundamental news is otherwise lacking following last weeks flow of crop tour pictures and summaries on social media. StoneX is scheduled to release the results of its monthly customer survey on Thursday afternoon, providing the trade with the first in a line of private production estimates ahead of its September 12 WASDE crop report. Otherwise, the lack of news allows the funds to refocus on trading recession fears, although few desire to be short corn currently.

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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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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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