Perspective: Morning Commentary for March 31

By: Arlan Suderman, Chief Commodities Economist

Thu, 31 Mar 2022, 13:19

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

March 31 – It is the end of a wild month and fiscal quarter on Wall Street, with a healthy dose of economic data and other news to contribute to what could be an interesting finish to the quarter. The VIX is trading quietly near 20 this morning following the release of today’s economic data, while the dollar index is trading near 98.1, after falling to a four-week low below 97.7 yesterday. Yields on 10-year Treasuries are trading near 2.33%, after hitting a 34-month high near 2.56% on Monday. Crude oil prices are down by nearly 5% this morning on President Biden’s plan to release up to 1 million barrels per day from the Strategic Petroleum Reserve, which is starting to dwindle in size. The Ags had a firmer tone to them this morning ahead of the highly anticipated Noon EDT USDA quarterly grain stocks and planting intentions report releases.

Personal income rose 0.5% month-on-month in February, after being flat in January. Today’s number matched analyst expectations. Personal consumption expenditures rose by just 0.2% month-on-month in February, down from 2.1% growth in January and below analyst expectations of 0.5%. In other words, personal income showed healthy growth in February, but the consumer started to pull back on spending amid rising concerns about inflation and geopolitical risks. Even so, inflation continued to rise in February. The PCE price index rose 0.6% month-on-month in February, matching the previous month’s gains, and matching analyst expectations. The PCE price index rose 6.4% year-on-year in February, up from 6.1% in January, matching the average analyst expectation, but a new 39-year high. The core PCE price index is what the Federal Reserve pays particular attention to in its economic assessment. The core PCE price index, which excludes the more volatile food and energy sectors, rose 0.4% month-on-month in February, down from 0.5% in January, but matching analyst expectations. The core PCE price index rose 5.4% year-on-year in February, up from 5.2% in January, but down slightly from analyst expectations that it would come in at 5.5% growth. The 5-year breakeven inflation rate, which is the market’s assessment of what inflation will be over the next five years peaked at 3.59% on Friday, but then it fell to 3.40% yesterday.

First-time claims for unemployment benefits rose to 202K in the week ending March 26^th, up from 188K the previous week, and above the average analyst expectation of 195K. This puts the four-week moving average at 208.5K claims, down from 212K the previous week and a historically low number. Continuing claims of those unable to find a job of an extended period of time fell another 35K to 1.307 million, which is its lowest level since December 1969 when it was at 1.304 million. In other words, the labor market remains quite tight, with more than 11 million open job postings that need to be filled from a very small pool of workers seeking a job. Today’s Challenger job cut report indicated that this month’s announced planned corporate layoffs total 21,387, up from 15,245 the previous month, but still a relatively low number. This report doesn’t distinguish whether the reductions will occur via actual layoffs, or through attrition.

China reported 1,803 new locally transmitted Covid cases yesterday, including 1,340 in Jilin province, with 335 in Shanghai and 20 other regions. The number of new domestically transmitted asymptomatic cases totaled 6,651, including 5,298 of them in Shanghai and 835 in Jilin. The economic impact is currently greater than the initial outbreak in Wuhan in 2020, because this round of infections has hit the financial hubs of Shanghai, Hong Kong, and Shenzhen. Shanghai just announced a “full jurisdiction static control” – they refuse to call it a full lockdown, but it essentially is. The original intention was to shutdown the east side of the city from Monday to Friday morning for testing, followed by the west side of the city from Friday morning until Tuesday. But the case numbers rose so high that authorities are now closing down the city for all practical purposes, with the chances for a quick reopening quickly evaporating. This will exasperate the economic impact for China, while reducing demand for energy and meat, along with a few other commodities. China’s economy is essentially beginning to contract.

Today’s focus in the Ags is on two reports from USDA – its quarterly grain stocks and planting intentions report. Here’s the bottom line. The South American drought removed roughly 35 million metric tons of soybean production from the global balance sheet, necessitating that the United States plant at least 89 million acres with trend yields in the year ahead, assuming some softness in Chinese demand. The Ukraine war removes more than 20 mmt of corn from the global balance sheet by itself, with South American production still an unknown. As such, the United States needs to plant at least 92 million acres of corn, and hope for normal yields.

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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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Mike CastleThu, 06 Aug 2026, 13:24

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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

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