Perspective: Morning Commentary for May 16

By: Arlan Suderman, Chief Commodities Economist

Mon, 16 May 2022, 13:19

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 16 – Stock futures are mixed to weaker this morning, as Wall Street continues to wrestle with 40-year high inflation, and the response of policymakers to tame it. Even so, the VIX is trading near 29 this morning, after finally breaking back below 30 on Friday, as fears ease a bit on Wall Street. The dollar index is consolidating near 104.4 this morning, which is just below Friday’s 19-year high just above 105.0. Yields on 10-year Treasuries are trading near 2.91% this morning. Crude oil prices are modestly lower this morning, with some 46 cities said to be under lockdown in one form or another in China, after they hit a fresh high for the month to date earlier in the session. The Ags traded sharply higher overnight, led by wheat, although they came well off their highs this morning. Nonetheless, the food-based commodities received a lot of hype and money flow overnight on food security concerns.

The Empire State manufacturing index fell to -11.6 this month, down from 24.6 in April and below expectations of 15.0. New orders fell and shipments dropped at the fastest pace since early in the pandemic. Delivery times grew, as did inventories. Yet, a modest increase in both employment and in the workweek is expected by surveyed firms. Both prices paid and prices received remain elevated, although they pulled back from their highs. Optimism about the six-month outlook remains subdued. The survey revealed that surveyed firms are cautious regarding the future, but they still expect higher prices and stronger employment in the months ahead, although capital expenditures fell to their lowest level in several months. The New York Fed is the first of the districts to report its survey findings each month.

India banned wheat exports over the weekend, sending shockwaves through the commodity world. The move had been rumored previously, but those rumors were countered by government claims that it had ample supplies to support aggressive exports. That all changed over the weekend when the government reversed its position, stating that no exports of wheat would be allowed outside of agreements already existing. It also indicated that it would agree to export wheat to governments in need of supplies to avoid food shortages. India is not traditionally a big exporter of wheat, but it was expected to help fill the gap left by the absence of Ukraine in the global market this year. Demand for wheat from India had been strong, with Ukraine wheat largely locked out off the world market by Russia. As such, exporters had aggressively moved wheat to ports to be in position to ship to overseas customers. Cash sources estimate that 1.8 million metric tons of wheat are stuck at ports that can’t be shipped due to this new order from the government. Exporters claim that they will lose money if they reposition the wheat back inland for domestic consumption. This story probably hasn’t been completely written yet.

India’s absence will surely be felt in global wheat trade, especially if North America has a short crop due to adverse weather in the Plains. USDA shocked the trade last week by posting a hard red winter wheat production estimate that was 95 million bushels, or 14%, smaller than the average trade guess, although still modestly above where we see it. That puts added focus on this week’s Wheat Quality Council Tour of Kansas and surrounding areas, which will give the industry its first boots-on-the-ground look at the crop. USDA pegged the Kansas crop at 271 million bushels in last week’s report, which is down 26% from last year’s crop. Oklahoma’s wheat was pegged at 60 million bushels, which is down 48% from 2021, and Texas was pegged at just 41.6 million bushels, down 44% from a year earlier. Many areas of central and eastern Kansas received scattered rains at times this spring, while others were missed. However, the real key to harvested production in the region will be the scope of wheat abandonment, which will surely be notably higher than normal this year, even with the higher prices. How much higher will hinge on the local options for alternative crops.

This afternoon’s USDA weekly crop progress report is expected to show rapid planting progress last week in some central and eastern portions of the belt, thanks to hot dry weather that prevailed across the region. Some areas reported that it took a day or two longer to dry the soils than they expected, but significant progress was accomplished. Things will likely slow down a bit this week, but we should see continued planting progress. Showers will scatter primarily across areas of the southern and northwestern Midwest Tuesday into Thursday, and then again in the northwestern Midwest into the Ohio River Valley late Thursday to Saturday. More notable interruptions to fieldwork are seen in week two, favoring southeastern areas of the belt next week Tuesday and Wednesday, and northwestern areas again in the 11- to 15-day period. Unseasonably cool temperatures are expected to return to northwestern areas of the Midwest Corn Belt in the 6- to 10-day period, before temperatures moderate again. Planting overall should continue to make progress, although some areas – especially in the northwest Midwest – will remain challenged to get it all done. Portions of the Dakotas and Minnesota remain most at risk of seeing increased prevent-plant acres this year due to the weather. Meanwhile, the drought continues to intensify in much of the Plains hard red winter wheat belt, and pollinating corn may encounter frost conditions in the southern quarter of Brazil’s safrinha corn growing region over the next three days.

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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: 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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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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