Perspective: Morning Commentary for September 12

By: Arlan Suderman, Chief Commodities Economist

Mon, 12 Sep 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 12 – Stocks are poised for a firm open this morning, following a gap higher on Friday. Additional supportive sentiment comes from positive news from Ukraine following a successful weekend counter-offensive by Ukrainian forces. The VIX is trading near 23 this morning, while the dollar index is notably lower near 108.1 as the euro surges in value. Yields on 10-year Treasuries are trading near 3.28% this morning, while yields on 2-year Treasuries are trading near 3.52%. Crude oil prices are trading 2% higher to start the week, while the grain and oilseed markets are mixed to weaker at the pause.

The euro surged in value overnight following hawkish comments made by members of the European Central Bank, who argued for more aggressive monetary tightening in the weeks and months to come. The euro pulled back from its session highs as the trading session progressed, but its strength still resulted in a significant profit taking selloff in the dollar. A weaker dollar removes some of the headwinds faced by the broader commodity sector in the near-term. One of the dollar’s big challenges in recent months has been the weakness in the euro, yen, and yuan. Today’s weakness in the dollar is encouraging for U.S. commodity competitiveness, but these competing currencies still have significant longer-term challenges that must be respected.

Ukraine seized momentum in its battle with Russia over the weekend when it initiated an offensive to retake territory in the northeast of the country that Russia has held for much of the past six to nine months. The offensive appears to have caught Russia by surprise, with Russian troops scurrying to retreat in the region. Ukrainian troops claim that they reached Russia’s original border in some instances, although that cannot yet be confirmed. Russia responded by saying that it chose to withdraw troops to reconcentrate its efforts in southern regions of Ukraine. Nonetheless, the offensive boosted morale for the fight within Ukraine in a war that has lingered on since late February. It may also encourage more western nations to step up military aid to Ukraine. The weekend’s developments led to some surprising opposition emerging within Russia creating signs of disarray, as Russian military bloggers and patriotic commentators reprimanded the Kremlin for failing to mobilize more forces and to take stronger actions against Ukrainian forces.

Does this mean that the war has reached a turning point? I don’t think that we can make that assumption yet, although Russia’s response to its weekend losses will be critical in that assessment. Russia has chosen to call this a “special military action” to this point to maintain support domestically, which means that Putin has leaned heavily upon voluntary forces. He’s being criticized for that now within Russia, with calls to change the focus and to add resources to the war effort; some of which are making it on state media. Ukraine is better utilizing a larger supply of western weapons provided to it for its defense. The question now is, how far will President Putin go to step up his engagement to match, and/or exceed, Ukraine’s new-found strength? Meanwhile, shelling continues near the Zaporizhzhia power plant – Europe’s largest nuclear facility. The last operational reactor in the plant has reportedly been shut down in an effort to prevent a disaster from an unintended radiation leak that could result from a missile landing in the wrong spot.

France signed an agreement with Romania Sunday to assist Ukraine increase grain exports to developing countries, according to Reuters. The draft agreement has Paris cooperating in developing a project aimed at increasing operational efficiencies at the port of Galati, equipping border points in northern Romania, and making better use of grain containers stationed in the port of Constanta while increasing capacity there. France would also support further development of the trade corridor between Romania and Ukraine to optimize ship traffic, while providing additional funding for the initial technical expertise and work with Bucharest to identify financing for future trade development. France took the step following President Putin’s recent comments disparaging the safe-corridor agreement that led to speculation that the agreement could be in trouble.

USDA will issue its monthly WASDE crop report at 11 a.m. Chicago time today. This is a critical report to give us a better idea of how the better yielding crop areas offset the poorer yielding areas where seed size was significantly compromised. I do not expect the September 1 crop sampling to catch all of those seed size issues, but it should at least catch enough of them to establish the trend to be confirmed with better data in October. As such, this report should set the tone one way or the other. My bias is that seed size issues were larger than expected, but we’ll see what USDA’s more comprehensive field sampling shows. The market seems prepared for the possibility of significant issues with corn, but it is not prepared for much of an issue with soybeans, although September 1 may have been too early to pick up many of the issues. Even so, that’s where we’re vulnerable to a surprise. I expect USDA to bump its acreage modestly higher for soybeans in this report, but that may be offset by a larger-than-expected yield cut if my bias is confirmed.

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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: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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