Perspective: Morning Commentary for May 17

By: Arlan Suderman, Chief Commodities Economist

Tue, 17 May 2022, 13:34

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 17 – The rebound in stock values gained momentum overnight as stock futures pushed notably higher, led by the tech sector that had absorbed the greater share of the losses in recent weeks. Strong retail sales combined with signs that China may slowly be reopening provided the impetus for today’s early strength, with the VIX trading below 27 for the first time since May 5^th. The dollar index broke sharply lower to trade near 103.5, while the euro rallied. Yields on 10-year Treasuries are trading near 2.97% this morning as they start showing some strength once again. Crude oil prices are modestly higher, but they still managed to set fresh seven-week highs above $115 per barrel overnight. The Ags had a wild night with wheat prices trading a 75- to 80-cent trading range, with a lower bias this morning. Meanwhile, Corn prices are soft, while the soybean complex is firmer in early trade.

Retail sales rose 0.9% month-on-month in April, up from 0.5% in March and beating analyst expectations of 0.8% gains. Keep in mind that this report measures changes in the total value of sales, which is a combination of volume times price. As such, it’s a measure of both quantity of sales and inflation. Retail sales minus vehicles rose 0.6% in April, down from 1.1% gains in April, but still above analyst expectations of 0.4% gains. Retail sales minus vehicles and gasoline rose 1.0% month-on-month in April, up from 0.2% gains in March and well above analyst expectations of 0.6% gains. In other words, core retail sales were strong in April, although much of that reflected the impact of inflationary prices.

Today’s edition of China Direct, published by our Shanghai office, notes that China reported 162 locally transmitted Covid cases on Monday, including 77 in Shanghai and 43 in Beijing. The number of domestically transmitted asymptomatic cases was 887, including 746 in Shanghai. The numbers are definitely trending lower, raising hopes that these massive cities will be able to open their economies once again. All 16 districts of Shanghai reached zero-status at the social level on Tuesday, allowing some residents to step outside their immediate community for a few hours at an appointed time, but with limited access to nearby streets. One resident noted that they were allowed to be outside for 4 hours, but they had to wait for 2 hours to enter a supermarket under strict limited access management. It’s difficult for us in the West to comprehend the scope of the restrictions the people of Shanghai and elsewhere have lived under since late March. Taxis and private vehicles were allowed in certain areas deemed safe. It’s hoped that Shanghai can reopen entirely by July, but of course, that’s based on the assumption that there won’t be another outbreak. Meanwhile, lockdown measures continue in certain districts of Beijing, despite low case numbers. The people of China will continue to live under the fear of lockdowns as long as the chance of another outbreak hangs over them, and that isn’t going away anytime soon. China is expected to maintain its current zero-tolerance policy toward Covid through at least October, when its National Congress meets.

China bought 17 cargoes of soybeans last week, according to “boots on the ground” there, with 14 of them being for June-July shipment from Brazil, where they currently have a slight price advantage over U.S. inventories, while two of the cargoes were for August shipment from the United States and one was a U.S. shipment for February shipment. Crush margins have maintained a negative bias, leading buyers to purchase mostly hand-to-mouth as they need the soybeans, providing lead time for shipment. As such, July/August coverage is behind the normal pace. This leads to concerns that China may cut demand, which is one reason why we’ve seen USDA cut its Chinese import target to 92 mmt for the current marketing year, down from 99.76 mmt last year. However, our sources within China believe that imports will end up being between 93 and 95 mmt – a bit larger than that expected by USDA. It also suggests that we could see more purchases of U.S. soybeans for shipment in the fourth quarter of the current marketing year, further pushing our exports higher and ending stocks lower.

USDA’s weekly crop progress report put U.S. corn planting progress at 49% as of Sunday, which is 28 points below the five-year average for this time of year. Soybean planting progress was at 30%, down from the five-year average of 39%. There’s still time to close the gap on corn planting, but this weather interruptions are expected to increase over the remainder of the month, versus what we saw last week. The greatest challenges will be in the Dakotas and Minnesota. Just 4% of North Dakota corn was planted as of Sunday, whereas progress sat at 31% and 35% respectively for South Dakota and for Minnesota. Spring wheat planting sits at just 39%, well-below the 67% norm for this week, with only limited windows of opportunity ahead. Meanwhile, the hard red winter wheat condition index score slipped 6 points to a record low for the date of 260 (500=perfect crop). Furthermore, 41% of the U.S. winter wheat crop is currently rated Poor to Very Poor, while just 27% is rated Good to Excellent. This puts much more emphasis on this week’s Wheat Quality Council tour of Kansas and surrounding areas, which will give industry representatives a first-hand look at the crop. They’ll likely see the worst of the wheat on the tour tomorrow morning, with reports circulating on social media.

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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

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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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