Perspective: Morning Commentary for February 10

By: Arlan Suderman, Chief Commodities Economist

Thu, 10 Feb 2022, 14:37

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 10 – This morning’s inflation data is the focus on Wall Street, while Brazil is the focus in the Ags. Stocks turned lower on higher-than-expected inflation numbers this morning, raising fears once again that the high numbers will lead the Fed to drain the punch bowl. The VIX traded near 22 this morning, so we’re not seeing panic at this point on Wall Street. The dollar index firmed to trade near 96.0 following the inflation data release, as yields on 10-year Treasuries surged to a new two-year high at 2.0%. Crude oil prices are modestly higher, while the Ags traded notably higher on lower Brazil production estimates due to adverse weather.

The consumer price index rose by 0.6% month-on-month in January, which was above the 0.5% expected by analysts. Furthermore, the December number was revised higher to 0.6% as well, up from 0.5% previously. That combination pushed the CPI up 7.5% year-on-year in January, its highest level since February 1982 – a level that I remember well. Today’s number beat analysts expectations of 7.3%, while being up from 7.0% in December. The core CPI that excludes food and energy costs also came in on the hot side at 0.6% month-on-month gains and 6.0% year-on-year gains, beating analyst expectations of 0.5% and 5.9% respectively. Energy prices were up 27% year-on-year in January, and they show signs of continuing to rise. Food prices were up 7.0% year-on-year.

Policymakers like to exclude food and energy, but they are a significant portion of what consumers pay. New vehicles were up 12.2% year-on-year in January, but used vehicles were up an astounding 40.5% year-on-year. Inflation remains a major challenge for fiscal and monetary policymakers, largely due to their own previous actions. Now Wall Street must decide whether it trusts those same policymakers to appropriately manage the problem. The Federal Reserve should release the minutes of its January meeting next week, which should make for some good reading considering the apparent disagreement over policy currently in the board room, based on comments being made by various members. The next Federal Open Market Committee meeting to discuss monetary policy is scheduled for March 15 & 16. Today’s inflation numbers increase the expectations that the Fed will be more aggressive in its hawkish shift, although policymakers prefer to focus on the PCE inflation data over the CPI. Fed fund futures trading today shows growing expectations that the Fed will bump its benchmark interest rate by 50 basis points when it meets next month, followed by another 25-basis point increase in May. The Fed is also expected to discuss the possibility of shrinking its balance sheet, which means extracting some of the trillions in stimulus still in the economy i.e., Wall Street’s punch bowl.

First-time claims for unemployment benefits fell to 223K in the week ending February 5, as we began to move beyond the Omicron surge. That was down from 238K the previous week, and below analyst expectations of 230K. The four-week moving average slipped lower to 253.25K claims, down from 255K the previous week. Continuing claims were unchanged at 1.621 million in the week ending January 29^th. Recent labor numbers suggest that the economy is being very resilient following this winter’s Omicron surge, with people very quickly getting back to work amid a tsunami push to open things up and to get past Covid restrictions across the country.

StoneX Brazil released its February customer survey production estimates last week that made headlines. Many people scoffed at its 126.5 million metric ton soybean production estimate, which was down from 145 mmt in December and 135 mmt in January. USDA dropped its production estimate to 134 mmt yesterday. However, StoneX Brazil’s estimate received some validation when CONAB – Brazil’s version of USDA – dropped its production estimate to 125.47 mmt, down from 140.5 mmt last month. As I’ve said before, this is a game changer for the global balance sheet if these production estimates are validated by the combines. Most of the drought-stricken areas of South America have not yet been harvested, so the combines must still verify the lower expectations. However, there is now enough evidence of sharply lower production that end users must respect the risk. The next commodity at risk in South America could be corn if the longer-term weather models verify. Confidence in the longer-term models is always suspect, but the stakes are high enough that end users cannot afford to look the other way. The ongoing geopolitical risks in Russia / Ukraine are a factor as well. Today’s inflation numbers play into the price risks as well. High inflation numbers, and fears of Fed action, tend to support a rotation of money out of assets that are hurt by rapidly rising prices and interest rates into assets that tend to rise along with inflation numbers – the commodities. Not all commodities will rise together, but thus far it has supported a flow into the Ag & energy sectors.

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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: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

Grains & Oilseeds

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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