Perspective: Morning Commentary for May 29

By: Arlan Suderman, Chief Commodities Economist

Fri, 29 May 2026, 13:08

May 29 – AI optimism and Middle East peace hopes provided modest support once again for stock futures overnight, with the major indices again on the cusp of possible record highs. The VIX sits below 16 this morning after setting new four-month lows on Thursday, while the dollar index continues to chop sideways near 99.1. Yields on 10-year Treasuries are trading near 4.45% this morning, while yields on 2-year Treasuries are trading near 4.01%. WTI crude oil sits at roughly one-month lows near $87 per barrel, while Brent trades near $92 per barrel on those peace deal hopes. The grains generally followed the energy markets lower overnight once again, while soybeans and soybean oil posted gains again on strong biofuel demand.

Wall Street wants a peace deal in the Middle East, and it interprets every headline in light of those hopes. Unconfirmed reports emerged on Thursday that a memorandum of understanding had been reached between Iran and the United States to extend the ceasefire another 60 days while they continued to negotiate on the most contentious issues – mainly Iran’s ability to maintain its uranium enrichment program. Another contentious issue has been the control of the Strait of Hormuz. Iran stands by its belief that it has the right to control the Strait, while President Trump is emphatic that no country has the right to control the Strait, and I think most other Gulf States would agree, and likely much of the international community. That remains the primary leverage that Iran’s Revolutionary Guard holds, which is why I question reports that the above-mentioned MOU includes guarantees for free passage of all ships from all nations over the 60-day window. The MOU also reportedly includes the requirement that Iran remove any and all placed mines placed in the Strait within 30 days of signing the deal.

President Trump says that he wants a few days to think about the deal, while Iran says the deal isn’t completed yet. Either way, this is not a peace deal, and this does not end the conflict. Rather, it’s an attempt to reach a state of Strategic Stability. Iran’s Navy and Air Force are both totally destroyed, but its lingering ability to create havoc and fear in the Strait of Hormuz keeps it in the game. The United States could eliminate that threat once and for all, but that would likely necessitate troops on the ground – a price that Americans aren’t likely to support. President Trump knows that, and Iran does as well. Thus the standoff, and the need to find Strategic Stability, which neither side will accept unless / until it can be done in a way that allows it to claim victory. That’s a difficult objective to achieve, and thus the standoff. The Strait remains Iran’s primary playing card, and the world is becoming desperate to have it open before the real energy and fertilizer crisis hits. Iran knows that its leverage only grows stronger the more that it delays the whole process.

But let’s assume that a deal is reached and signed this weekend – what will it mean for commodity flows through the Strait of Hormuz? The answer is, very little initially. It will have a big psychological impact on the markets, and particularly the speculative money in the markets. But ship captains will be slow to have confidence in safe passage through the Strait amid reports of mines in the waters of the Strait and fear of Iran breaking the treaty. That will slowly change if Iran retrains itself from attacking any ships, and ships start moving without incident in the Strait. Ships loaded with product will begin to flow, but it will be a long time before we see that flow top 100 tankers per day again. Ships already loaded can flow, and storage can be emptied, but then wells will need to be restarted. In some cases, infrastructure will need to be rebuilt. Natural gas infrastructure will also need to be rebuilt. In fact, Qatar’s liquified natural gas export terminal could take 3 – 5 years to reach full capacity again.

The crude oil deficit is currently near 14 million barrels per day. Roughly 7 – 8 mbpd can be replaced within weeks, but the rest will take months to recapture, allowing deficits to continue to build on the global balance sheet. Keep in mind that recent successful strikes on Russian refineries by Ukraine have also curtailed its ability to export product. The bottom line is that greater than 15% of the world’s oil supply is offline and opening the Strait today would still see a significant portion of that deficit in place for months to come, while the same is true for 20% of the world’s liquified natural gas export capacity. The latter is also a significant contributor to global fertilizer production, in addition to providing energy to the world. Don’t let the prospect of short-term relief obscure the fact that global deficits will get worse before they get better, and that’s if the Strait actually does open.

We’re heading into another weekend with peace optimism pressuring energy and grain prices. That could change with the next headline. The strong biofuel program provides fundamental support for the oilseeds amid all of the above. The Northern Hemisphere wheat harvest has begun, providing seasonal pressure, although some questions remain over crop size. Few weather threats are seen at this point for the summer crops to impact sentiment.

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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

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Mid-Day Commentary for August 3

August 3 – The Dow Jones is up over 500 points as of the time of this writing, right in the range of the record high close just under a month ago; the marketplace at least appreciates the rhetoric from Trump calling for negotiations, and WTI crude oil dropping by around $5/bbl. The S&P and NASDAQ are also up 1% or better on the session, while treasury yields suffer chop lower on the day, with the ten-year note down slightly at 4.69% at this time.

Mike CastleMon, 03 Aug 2026, 15:10

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