Perspective: Morning Commentary for September 14

By: Arlan Suderman, Chief Commodities Economist

Wed, 14 Sep 2022, 13:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 14 – Inflation is again the lead topic on Wall Street, as traders digest this morning’s producer price index data, following yesterday’s surprising consumer price index data. A similar pattern was seen in this morning’s data, but the market response has been much different thus far, with traders largely believing that yesterday’s big selloff priced in the news already. Even so, the VIX is trading near 27 this morning, reflecting elevated fear levels on Wall Street. The dollar index is trading near 109.4, which is a bit softer following yesterday’s surge in value for the greenback. Stock futures are generally firm, but gains are quite modest considering yesterday’s big losses. Yields on 10-year Treasuries are trading near 3.43%, while yields on 2-year Treasuries are trading at new 15-year highs above 3.80%. Crude oil prices are mixed to higher, while the grain and oilseed markets are mostly lower in early trade.

The headline producer price index number fell 0.1% month-on-month in August, matching analyst expectations, although stronger than the minus 0.4% seen in July. The PPI rose 8.7% year-on-year in August, matching analyst expectations, while down from 9.8% the previous month. The core PPI rose 0.2% month-on-month in August, matching the previous month’s pace, while falling below the 0.3% level expected by analysts. The core PPI rose 8.1% year-on-year in August, up from 7.6% the previous month, and well above the 7.0% anticipated by analysts. The strength in the core PPI is again the concern of Wall Street, suggesting that inflation remains a problem, even after food and energy-based commodities pulled back notably, and some food-based commodities are now rallying again, raising concerns regarding future inflation readings.

This raises significant concerns regarding the possible nationwide rail strike that may occur starting Friday morning. The railroads have largely already stopped accepting products that they would not want stranded on rail lines, such as those considered hazardous in nature. Some railroads will also halt accepting grain shipments on Thursday, in anticipation of the strike. The strike, if it occurs, is expected to dramatically slow supply chains, while increasing upward inflation pressures. It is largely believed that the strike will occur unless Congress steps in to prevent it. Our sources in Washington tell us that legislation has been prepared to do just that, which legislators believe that President Biden would sign. However, neither the leadership in the House nor Senate has thus far been willing to entertain discussion or a vote on the legislation. That likely explains why the White House began making contingency plans for a strike. Most people expect that the pain caused by the strike will be so great as to prevent it from lasting long, but the possibility exists for something longer that would disrupt movement of grain and fertilizer, ethanol, soyoil, soymeal, crude oil, etc.

The United States is preparing a sanction package against China should it make an aggressive move to “reunify” Taiwan to itself, according to various sources here in the States. A similar attempt failed to deter Russia from invading Ukraine, so policymakers are seeking to improve on those efforts with the China package that would reportedly restrict some trade and investment with China in sensitive technologies like computer chips and telecoms equipment. The package is said to be far more complex than what was put together to deter Russia. Other wording included could really ruffle China’s feathers, with the package reportedly changing the language of previous policy regarding Taiwan. It is said to change the language of providing arms to Taiwan from being in a “defensive manner” to “arms conducive to deterring acts of aggression by the People’s Liberation Army.” Taiwan would reportedly be designated a major non-NATO ally for the United States. China would see this bill as a complete change from the previous “one-China” policy held by the United States since 1979, likely leading to more geopolitical uncertainty. It’s response would be expected to be much more severe than what we saw earlier this summer, possibly impacting trade between it and the United States.

Chinese feed production is rising, suggesting a resurgence in demand for meat, and profitability for producers of protein. Pig feed production rose 8.5% in August, although it was still 11.2% below year ago levels. Broiler chicken feed was up 3.2%, although that was still down 9.9% from the previous year. Year-to-date feed production through August was 187.46 million metric tons, down 5% year-on-year. Pig feed accounted for 43% of the total, down 7.9% year-on-year. Corn substitutes are in decline, so corn use in rations rose to 30.1%, up 8.9% on the year, with soymeal use up 1.4%. Domestic soybean crush continues to strengthen, coming in at 1.96 mmt last week, which was above the 1.86 mmt the previous year and above the five-year average of 1.82 mmt. Soymeal inventories were nearly half of year ago levels and 42% below the five-year average. Soybean inventories at crushing plants were only 5.88 mmt, down from the typical 7.3 mmt level. Cash traders say that Chinese buyers took advantage of Argentina’s “pesos for soybeans” program by purchasing at least 20 cargoes for September and October shipment, that will reduce their need for U.S. soybeans this fall. Argentine soybeans have lower protein content, but they help China diversify away from dependency on the United States for soybeans in light of the rising tensions between the two nations.

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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: 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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Morning Grain Comments 8-6

Morning Grain Market Comments - Matt Zeller

Matt ZellerThu, 06 Aug 2026, 11:56

Grains & Oilseeds

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