Perspective: Morning Commentary for September 27

By: Arlan Suderman, Chief Commodities Economist

Mon, 27 Sep 2021, 13:44

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 27 – Stocks turned cautious early this morning, ahead of what is expected to be a big week for Wall Street as traders assess conditions in Washington. Policy matters, and there is a plethora of policy issues on the table for consideration in the week ahead. The VIX is near 19 this morning. The dollar index is trading near 93.4 as it consolidates just below significant chart resistance. Yields on 10-year Treasuries are trading at three-month highs near 1.50%, contributing to the dollar’s strength. Crude oil prices are up 2% at fresh 11-week highs, while the Ags were mostly firmer this morning.

A possible government shutdown is at hand on Friday if Congress fails to act to fund the government prior to that point. That wasn’t considered to be a concern with the same political party in control of both the executive and legislative branches, but the funding still hasn’t occurred. Ironically, stocks have a history of doing well when the government shuts down, so that’s not necessarily the problem. The bigger problem is, can Congress successfully deal with the debt ceiling issue if it can’t find a way to fund the government. The debt ceiling will be up on us over the next couple of weeks, and Congress seems to want to tie the two issues together. The debt ceiling is the bigger of the two issues. Just to make things more interesting, Congressional leaders want to tie the $5 trillion social spending bill to the other two issues as well this week, further complicating the process, along with the $1.2 trillion infrastructure bill. It’s no wonder that yields on 10-year Treasuries are surging, as traders anticipate increased demand for buyers of the government debt. Many members of the Federal Reserve are scheduled to make public appearances this week as well, which could add to the color as we move through the week. How it all plays out is yet unknown, but the opportunity is certainly present for increased volatility in the broader markets.

Durable goods orders rose 1.8% month-on-month in August, which was triple the 0.6% expected by analysts. Furthermore, July durable goods orders were revised to 0.5% gains, up from the 0.1% decline originally reported. However, durable goods orders minus transportation rose just 0.2% in August, which was half the 0.4% growth rate expected by analysts and a quarter of the 0.8% growth rate seen in July. Core capital goods rose 0.5% month-on-month in August, up from analyst expectations of 0.2% and above the 0.3% growth seen in July.

The Centers for Disease Control reported 130,638 positive Covid-19 tests on Friday, the latest date for which data was available this morning. That’s considerably below the 190,056 positive tests registered on September 1^st. The seven-day moving average fell to 114,413 on Friday, which was its lowest level since August 7^th. Hospitalizations appear to have peaked in the last week of August as well. Unfortunately, deaths have not turned lower yet. The CDC reported 2,177 Covid-related deaths on Friday, which is the highest total since February 12^th. The seven-day moving average for Covid-related deaths rose to 1,595, which is a fresh seven-month high. The daily death total is showing signs of topping, but it hasn’t turned lower yet.

A shortage of power has shut down well over 20 soybean crushing facilities in China. Power generation capacity is still present, but sharply higher coal prices raise the cost of producing electricity above what the power companies are allowed to charge. As such, they’re simply reducing power supply, necessitating the shutdowns. The shortages are pushing soymeal values higher, although the lower supply of soymeal is partially offset by the lower demand due to lower hog numbers. How long will this last, and will it have a detrimental impact on total demand for U.S. soybeans in the current marketing year? That hinges on when the government decides to intervene in the power supply issue? Some believe that things will improve after the National Day holiday, which starts Friday and lasts through much of next week, but that’s also contingent on the Chinese government getting involved.

The bigger question near-term is, when will the ports of New Orleans be fully operational. Most, but not all, of the facilities are now back in operation. This morning’s USDA inspection data for the week ending September 23^rd will be critical to the market tone. We need to quickly get back to loading 90 – 100 million bushels per week if we’re going to hit the current Chinese export target before cheaper Brazilian supplies hit the market early next year. This morning’s data needs to show a dramatic movement in that direction, with the goal of reaching that peak pace over the next week to 10 days. Meanwhile, the markets will also be vulnerable to volatility in the outside markets as described above. Updated private production surveys begin to emerge next week.

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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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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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