Perspective: Morning Commentary for January 5

By: Arlan Suderman, Chief Commodities Economist

Wed, 05 Jan 2022, 14:25

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 5 – This week’s enthusiasm was checked this morning by caution ahead of this afternoon’s scheduled release of the minutes of the December Federal Open Market Committee meeting, putting the focus back on the Fed, and its ability or inability to properly manage the current inflation problem. The VIX remains near 17, so we’re not looking at a noticeable increase in fear ahead of this afternoon’s release of the minutes, but rather a bit of caution that permeated across the broader markets, including both the equities and the commodities. The dollar index continues to trade near 96.0, with yields on 10-year Treasuries remaining elevated near 1.65%. Crude oil prices are up roughly 1% in early trade, but the Ags pulled back from yesterday’s strong gains in overnight trade.

The private sector added 807K jobs in December, according to this morning’s ADP employment report, which is nearly double expectations that the economy added 414K jobs. November job creations were revised to 505K, down from the 534K previously reported. The correlation between ADP’s numbers and the government’s official monthly jobs report numbers has been disappointing at times, but today’s big number is encouraging ahead of Friday’s jobs report, and it has believability. The weekly data for jobless benefits pointed toward strong employment last month, with continuing claims numbers falling sharply to their lowest level since the first week of March 2020. It’s still possible that Omicron will result in disappointing results for January, but the signals thus far suggest that the employment sector tightened amid a healthy economy in December, even as Omicron numbers were rapidly rising.

Omicron is the dominant variant of Covid-19, according to the numbers that I’ve seen showing it represents more than 90% of the cases in the United States currently. Daily case numbers are well over 1 million per day now, not counting the at-home tests that are not reported and considering that many people can’t even find a test. The seven-day moving average is now challenging a half million per day, which is essentially double the previous record set a year ago. FlightAware reports that 1,371 flights within, into or out of the United States have already been cancelled this morning, with another 840 delays recorded already, mostly due to crews calling in sick. Yet, the economy continues to roll, with Wall Street focused on whether the Fed can properly manage inflation without harming economic growth, while also focused on Friday’s monthly jobs numbers.

China reported just 41 new locally transmitted Covid-19 cases yesterday, including 35 in Xi’an – home of its greatest outbreak to date since the initial one at Wuhan. The city of nearly 13 million people remains in a virtual lockdown, negatively impacting economic activity in the region. However, there is a human toll as well. Workers delivering supplies are over-stretched, and they cannot keep up. People are complaining that they’re running out of food and other necessities. Neighbors are swapping food to deal with the shortages. However, one of the top headline stories upsetting people in the city was the report that an eight-month pregnant woman was refused entry to a hospital because of her expired Covid-19 test, resulting in the death of her baby. People are reportedly not being allowed entry into hospitals for treatment without a negative Covid test. The culture of China to a great extent is much more compliant than that of we Americans. Yet, the current lockdown measures are testing that. The Chinese government is responding by blaming local officials; many of which it has released and/or punished for allowing the outbreak to occur. Reports today indicate that another top data official was suspended after a local health code App crashed for a second time. It’s not a good time to be a local official in Xi’an, unless you like playing the role of the scapegoat. Nonetheless, the bottom line is that the lockdown is reducing Covid numbers, even as government officials begin watching for the next outbreak somewhere in China. The next one could be of the Omicron variant, which would be expected to present even greater challenges.

The first two trading days of this year were all about shifting money flow relative to fund manager analysis of the primary macro-fundamental drivers for 2022. Early indications are that today’s focus shifts back to the micro-issues of today, rather than the macro-issues of 2022. That means, what will we see in today’s Fed minute release, as well as Friday’s jobs report, that might change the dynamics? Fundamentally, not a lot has changed. It’s predominantly hot and dry in Argentina, Paraguay, and southern Brazil. What’s done is largely done in Paraguay and southern Brazil, but there are some indications that conditions may moderate in Argentina as we move into February. Global quality milling wheat supplies are still tight, the crop in the U.S. Plains has problems, but wheat is a crop that can quickly recover if the spring weather pattern is favorable. This leaves these markets vulnerable to periodic setbacks.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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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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