Perspective: Morning Commentary for December 9

By: Arlan Suderman, Chief Commodities Economist

Thu, 09 Dec 2021, 14:27

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 9 – This week’s recovery rally lost momentum on Wednesday, facilitating some weakness overnight, while digesting news of a default on dollar-denominated debt by China’s Evergrande Group. The VIX is modestly higher near 21 this morning, after falling to a two-week low just below 20 on Wednesday. Stocks are weaker, but there are few signs of panic on Wall Street. The dollar firmed to trade near 96.1 this morning, while yields on 10-year Treasuries pull back to trade near 1.49%. Crude oil prices are down nearly 1% in early trade, while the Ags are mostly lower while marking time ahead of today’s USDA WASDE crop report.

China property entity Evergrande Group is labeled a defaulter for the first time as Fitch Ratings downgrades it to “restricted default” status after it failed to make two coupon payments by the end of the grace period on Monday. The default is largely on China’s dollar-denominated debt, while China appears to still be propping up Evergrande’s obligations to its domestic investors, which make up the major share of its debt. China’s property sector remains in a tenuous position – some would call a bubble – but it’s been here before, and it found a way to move beyond the problems. Yet, a state-run economy is not immune to economic principles that can either lead to a booming success or to great hardship. China recently lowered its bank reserve requirements and eased real estate restrictions in an effort to prop up the sector, while directing funding to higher-rated developers. This is still something to monitor longer-term in an economy that is struggling anyway due to a host of other issues.

One of those issues is Covid. China reported 83 new Covid cases yesterday, with 60 of those cases originating domestically. Authorities reported finding 42 new cases in Inner Mongolia, 12 in Zhenjiang, 4 in Harbin City, 1 in Yunnan and 1 in Jiangsu. Aggressive lockdowns and restrictions continue in these regions as authorities try to stamp out this latest outbreak. Omicron will present even greater challenges to China’s zero-tolerance policy if it spreads quicker than the Delta variant, as indicated early assessments of the virus.

Commodities remain a key part of the inflation discussion, especially for fund managers. There are two primary types of funds – hedge funds and index funds. Hedge funds tend to be quick in and quick out of markets, depending on the latest headline, changing fundamentals, chart signals, changes in momentum, etc. Index funds build a broad-based portfolio that offers growth opportunities while also spreading out risk. Commodities often play a big role in those funds. They tend to be very slow and intentional about their investments, announcing their desired portfolio makeup well ahead of making changes that impact money in or out of the sector, based on commodity indices. These funds typically rebalance their portfolios each January tied to these indices.

S&P Dow Jones Indices announced its anticipated target weightings for its S&P GSCI index, formerly the Goldman Sachs Commodity Index, recently. This index, which contains 24 different commodities, will rebalance to its desired weightings starting January 7^th. Energy commodities will remain the largest sector of the index at 53.48%, down slightly from 53.93% in 2021. Agriculture (20.48%) and Industrial Metals (12.7%) will both see modest increases. Breaking down the details a bit further, those commodities seeing an increase in their share in the index in 2022 include corn, soybeans, sugar, lean hogs, RBOB gasoline, brent crude oil, natural gas, aluminum, copper, and silver. The Bloomberg Commodity Index (BCOM), with 23 commodities, will see a heavier weighting for precious metals, while seeing decreases in energy, grains, softs, livestock, and industrial metals. Specifically, the BCOM will see increased weightings for brent crude oil, low Sulphur gas oil, corn, hard red winter wheat, copper, aluminum, gold, silver, and lean hogs. Energy will make up 29.83% of the BCOM, while gold alone will make up 15% of the index. The rebalancing of most of these indices takes place in the 5^th to the 9^th trading day of January.

Today’s focus of the Ag commodity markets will be on USDA’s monthly WASDE crop report. The agency tends to leave its domestic production estimates alone in December, waiting for surveyors to complete their final analysis for the January report. It’s also early for the agency to make significant changes to its South American production estimates, although we could see minor tweaks to the numbers. As such, the focus will be on whether USDA chooses to adjust the demand side of the ledger. We could see the agency boost corn ethanol use, while both corn and soybean exports are vulnerable to reductions. My bias is that USDA will wait until January or February to adjust exports, when it could also adjust feed usage for corn and wheat.

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 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

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

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

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

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

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.