Perspective: Morning Commentary for November 9

By: Arlan Suderman, Chief Commodities Economist

Tue, 09 Nov 2021, 14:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 9 – Stock futures had a weaker tone overnight, ahead of this morning’s inflation data. The VIX slowly inched higher to trade above 17 this morning. The dollar index is trading near 94.0, while yields on 10-year Treasuries are trading near 1.46%. Crude oil prices are modestly higher, while the Ags traded mixed to higher ahead of today’s USDA WASDE report.

The small business optimism index, which is a survey-based indicator of the health of the small business sector conducted by the National Federation of Independent Businesses, slipped to 98.2 in October, down from 99.1 in September and below analyst expectations of 98.5. “Small business owners are attempting to take advantage of current economic growth but remain pessimistic about business conditions in the near future,” said NFIB Chief Economist Bill Dunkelberg. “One of the biggest problems for small businesses is the lack of workers for unfilled positions and inventory shortages, which will continue to be a problem during the holiday season.” The NFIB reported that small business owners expecting better business conditions over the next six months fell four points to a net negative 37%. This indicator has declined 17 points over the past three months to its lowest level since November 2012.

Inflation continues at a high rate at the wholesale level, according to data released this morning by the Bureau of Labor Statistics. The producer price index rose 0.6% month-on-month in October, matching analyst expectations, but up from 0.5% inflation in September. The PPI was up 8.6% year-on-year in October, matching both the previous month and analyst expectations, but a strong inflation pace that is expected to be passed along one way or another to consumers down the road. The core PPI that excludes the more volatile food and energy sectors rose 0.4% month-on-month in October, matching analyst expectations, but double the 0.2% rate seen in September. The core PPI rate rose 6.8% year-on-year in October, matching the previous month and matching analyst expectations. We should see updated inflation data from the consumer level tomorrow morning, but it is also expected to confirm this trend toward perpetual transitory inflation.

Inflation will be one of the stories that shapes the markets longer-term. Fund money tends to flow into the commodity sector as a hedge against inflation, altering how the market manages supply and demand. Supply and demand still matter. The presence of inflation doesn’t change that. But it does alter how the market manages supply and demand. Everything tends to take place at a higher level than it would if we were in a deflationary period. Yet, it will not affect every commodity the same. Those commodities with the best fundamental story will tend to attract the most money, while those with the weakest story will attract the least money. In fact, the presence of inflation does not insulate a commodity from trending lower if it has poor fundamentals, although it may not trend as low as it might otherwise if we were in a deflationary phase of the economy.

That is the context that will shape the commodity markets in the months ahead. The energy markets are a favorite option for fund managers seeking to hedge against inflation in their portfolios. They’re currently balancing the smaller rise in supply versus the growth in demand in the United States and much of the world as Covid numbers decline, against China’s slowing economy as it implements its zero-tolerance policies toward Covid. Hard red wheat, which is a favored wheat by global millers is also a target of fund managers worried about rising food costs this year. Corn entered that basket of commodities this fall as surging costs for crop inputs emerged as a risk for 2022 global production. How much of a risk there is to next year’s production hasn’t been determined yet, but December 2022 corn futures continue to attract attention from fund managers. Soybeans are increasingly becoming a commodity that is not favored, since a decrease in corn area due to high input costs would be expected to increase area devoted to soybean production, combined with soft demand from China.

Today’s USDA WASDE crop report is expected to play into that mix. USDA is expected to increase the size of this year’s corn and soybean crops, but it will likely be handled differently by the market over time due to the above dynamics. There is expected to be an increased focus on the demand side of the balance sheet after today’s report, although traders will continue to monitor South American weather. The next crop report of great significance will be in January, which will allow the broader macro picture to influence grain and oilseed trade to a greater extent.

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

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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

Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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

Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

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