Perspective: Morning Commentary for May 17

By: Arlan Suderman, Chief Commodities Economist

Wed, 17 May 2023, 13:43

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 17 – Stocks pointed higher overnight on optimism that the White House and House Republicans will reach a deal to avert a debt crisis, after House Speaker Kevin McCarthy stated he believes that the U.S. will not default on its debt now that the two sides are sitting down for discussions. Regional bank stocks were leading today’s gains, reflecting easing concerns for that sector. The VIX is trading near 17 this morning, reflecting calm spreading over Wall Street. The dollar index firmed to trade to a new six-week high above 103 this morning. Yields on 10-year Treasuries are trading near 3.54%, while yields on 2-year Treasuries are trading near 4.10%. Crude oil prices traded more than1% higher above $72 per barrel. The grain and oilseed complex is mixed this morning, with the hard wheat markets firmer on weather worries, while corn and soybean prices continued to post double-digit losses.

U.S. debt ceiling talks will occupy an increasing space among the headlines as we move through the last half of May. We’ve been through this many times before, and the ceiling always gets raised. It will likely be raised again this time as well, as neither side wants to see a default on our nation’s debt. However, our nation is far more partisan than it has been at any time in the past, and that raises the risks that a deal will not be reached. Wall Street continues to expect an increase, but it also recognizes that there is some degree of risk that it will not be raised. The good news is that the two sides are finally talking, which means that they’re willing to negotiate. However, both sides also know that their greatest leverage in negotiations comes in the 11th hour of the talks, and we’re not there yet. Two primary points of discussion will include the scope of the increase, and the scope of budget restraint/cuts associated with the increase. But the bigger problem to emerge over the next couple of years that has yet to be addressed is the exploding interest costs of this debt.

Housing starts rose to an annualized rate of 1.401 million units in April, although that is slightly below analyst expectations of 1.405 million. However, the March number was revised to 1.371 million units, down from the 1.420 million originally reported. Permits for new housing starts came in at an annualized rate of 1.416 million, below analyst expectations of 1.430 million. The March numbers were revised to 1.437 million, up from the 1.413 million originally reported. Industry sources continue to report pent-up demand for homes but buying is limited by today’s current environment of uncertainty and higher interest rates. Consumers seem to be adjusting to the higher interest rates, willing to buy on breaks in rates, but economic uncertainty remains a concern.

Slowing energy demand in April adds to concerns that China’s post-Covid recovery is sputtering. China’s National Energy Administration reported that total electricity consumption fell 6.35% month-on-month in April, while power generation declined 8.21%. Domestic coal production dropped 8.6% month-on-month, while coal import growth slowed to 72.7% year-on-year, down from 150.7% in March. This is growth off a low base from a year ago during the Covid lockdowns. Domestic crude oil production fell 1% month-on-month in April, while crude imports dropped 1.4% year-on-year, versus an increase of 22.5% year-on-year in March. Today’s data casts even more doubt over the health of the Chinese economy.

The “on-again, off-again” grain initiative is on-again today. Turkish officials initially stated that they’ve helped seal a deal to extend the Ukraine grain initiative that would allow cargoes of grain to continue to leave three approved Ukrainian ports, although Russia officials declined to confirm such was the case, and Turkish officials now merely say that a deal is a “high probability.” The current deal is set to expire tomorrow, with recent movement only seeing cargoes leaving the ports – with no new ships moving into the ports due to the uncertainty. The deal was first inked in July of last year, and it has facilitated some 30 million metric tons of Ukraine exports since then. Fifty percent of the exported grain was corn, while another 28% was wheat. However, movement has frequently been interrupted by Russian tactics to stall movement in recent weeks and months. Extension of the agreement was also complicated by Turkey’s presidential election process, which is now waiting for a run-off election on May 28.

Day one of the Kansas Wheat Quality Council tour confirmed that this will be one of the worst hard red winter wheat crops in recent history. The official measured Day #1 tour yield was 29.8 bushels per acre, down from 39.5 bpa in last year’s drought-shortened crop, and down from the five-year average for Day #1 of 45.4 bpa, but there’s serious doubt about the accuracy of the formulas in this year’s tour. First, Day #1 observations told me that abandonment may be even higher than projected by USDA at today’s fuel prices. Wheat is too short to be worth running a combine over it in many cases, and weeds will be a significant problem where rain does fall. Day #2 is expected to see even worse wheat as tour participants drive through areas of more intense drought. A look at six analog years finds that USDA’s hard red winter wheat production estimate fell between now and the final estimate in September in five of those six years.

Grains & Oilseeds
Base Metals
Precious Metals
Digital Assets
Energy
Dairy
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products
Currencies
Interest Rates

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.

The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.

References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.

StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.

StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.

This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.

StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.

StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).

SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.

StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.

StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

Grains & Oilseeds

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.