Perspective: Morning Commentary for September 7

By: Arlan Suderman, Chief Commodities Economist

Tue, 07 Sep 2021, 13:38

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 7 – Stocks struggled to maintain upward momentum coming out of the holiday weekend, following a disappointing jobs report on Friday. However, underlying support comes from expectations that Friday’s numbers will provide fodder for the doves when the Federal Open Market Committee meets in two weeks. Nonetheless, the VIX inched higher to trade at its highest level since August 27^th this morning, sitting above 17 as this week’s trade begins. The dollar index firmed to trade near 92.5, after bouncing off one-month lows on Friday. Demand for the dollar increased today as yields on 10-year Treasuries surged to 1.37%, which is just below eight-week highs. Crude oil prices are down by more than 1% this morning, while the Ags were mixed to higher overnight.

There’s no doubt that Wall Street was disappointed in Friday’s monthly jobs report that showed the economy adding just 235K jobs in August, even as the unemployment rate fell to 5.2%. One area still struggling notably is the leisure and hospitality sector that saw employment unchanged in August. There were a lot of positive numbers in this report, but perhaps more jobs were not created due to the shortage of available qualified bodies to fill those positions. The government’s household survey showed that the number of unemployed edged slightly lower to 8.4 million, after dropping more notably in July when many states dropped their supplemental unemployment benefits. Funding for the remainder of the states for that supplemental funding ended over the weekend, so it will be interesting to see the September jobs numbers reported early next month to see if that makes a difference. The 8.4 million unemployed compares to 5.7 million pre-pandemic when the unemployment rate was at 3.5%. It’s becoming increasingly clear that the shortage of workers has become a significant limiting factor for our economy.

Fed Chair Jerome Powell has made it clear that reaching full employment is a high objective of his prior to tapering, while also pointing to ongoing risks from the Delta variant of Covid-19. As such, Friday’s report is expected to provide an argument for the doves to hold off serious talk about tapering, even as the hawks on the Federal Open Market Committee press forward seeking a plan for tapering. No change in policy is currently expected out of the September meeting, but Kansas City Fed President and CEO Esther George suggested recently in a media interview that the Fed may discuss a schedule for tapering at its September meeting. Perhaps the greater insight will come when the minutes of the September meeting are released in early October.

The Centers for Disease Control reported 157,997 positive Covid tests on Friday, the latest date for which data was available this morning. Many states are no longer reporting test results over the weekend, leading to significant volatility in the daily numbers. The weekend numbers are then back reported early in the week. However, it is significant to note that last week’s high of 179,124 on Wednesday was below the previous week’s high of 180,731. The seven-day moving average on Friday was 150,316, which was down from Wednesday’s high of 155,324. It’s too early to confirm, but the CDC data definitely appears to show a topping action on the current wave of the Delta variant, which would be good for the economy and for demand for commodities. Unfortunately, the daily death count continues to rise from those who contracted Covid over the past six weeks or so. The CDC reported that the seven-day moving average for deaths hit a new nearly six-month high 1,114 per day on Friday. That’s up from 190 per day in early July, but still well-below the peak of 3,643 seen in January.

USDA reported the sale of 12 million bushels of U.S. hard red winter wheat to Nigeria this morning. This follows a month of active flash reports showing sales of soybeans primarily to China, along with some corn sales to Mexico and others. The demand side of the balance sheet received a bit more focus over the past month. The lower Mississippi River has largely been cleared of enough debris for barges and ships to move through the ports at New Orleans once again as power is slowly restored. Some terminals received more significant damage than others, but export shipments will be slowly ratcheting higher, with little longer-term impact to the demand side of the ledger seen as a product of Hurricane Ida. Some commodities continue to be rerouted, but overall volume should not see much impact in the end. The focus is otherwise on USDA’s WASDE report on Friday to see where it pegs corn and soybean yields utilizing objective field sampling for the first time this year. Traders are also starting to eye forecasts for Center-West Brazil where soybean planting is scheduled to begin on September 15^th. However, most areas need to see a couple of inches of rain to prepare the soils first, and that could prove to be a problem if a re-emerging La Nina keeps the region dry as it did last year. Forecasters are currently split on rain expectations for the region.

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Perspective: Morning Commentary for August 6

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Mike CastleThu, 06 Aug 2026, 13:24

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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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