Perspective: Morning Commentary January 6

By: Arlan Suderman, Chief Commodities Economist

Tue, 06 Jan 2026, 14:26

Today's Perspective Video: China and Venezuela - The Hidden Connection

January 6 – It’s day #3 of the new trading year, and many of the headlines are focused on Venezuela rather than the Federal Reserve, or the U.S. economy, and understandably so. Yet, there is a focus on this week’s critical jobs data that will likely have a longer-term impact on monetary policy from the Federal Reserve. Stock futures were quietly mixed for the most part overnight, with the VIX trading near 15, and the dollar index trading near 98.4. Yields on 10-year Treasuries traded near 4.17% as they continue to consolidate just below 4.2%, while yields on 2-year Treasuries trade near 3.46% as the yield curve continues to steepen, despite the Fed’s policy. Crude oil prices firmed again overnight, while the grain and oilseed complex was quietly mixed.

The implications of President Trump’s extraction of Venezuelan President Maduro to face drug and weapons charges continue to play out. Those who support the president generally can provide lots of reasons why it was the right thing to do, while those who oppose can do the opposite. My focus will primarily be on the implications for the commodities as played out in geopolitical shifts. Venezuela obviously has the world’s largest known reserves of crude oil, but the infrastructure for production and export of that oil is in disrepair. U.S. companies largely developed the industry, but they were dismissed from the country. They’re going to be reluctant to return with massive investments until they have some reassurances of political stability. That becomes the challenge. Delcy Rodriquez is now on top of the government of Venezuela. She has strong Maduro ties, but she also has a power structure in place to avoid a power vacuum that could create civil war. That will be a challenge for Trump to navigate. The bottom line is that peace and business confidence are essential for investment in the oil industry.

As for Ag imports, Venezuela imported less than 1 million metric tons combined of corn, soybeans and wheat from the United States in the first nine months of this year, but they have been our top export customer for soybean oil thus far this year. That said, Ag imports are not expected to be significantly impacted by the actions thus far as long as civil war can be avoided. Receiving very little focus are the vast reserves of rare earth minerals believed to be in Venezuela. China currently holds a near monopoly on processed rare earth minerals that are essential for much of today’s high tech manufacturing ability, but also for the production of critical defense weapons. It is currently withholding export of those rare earths to the United States and Europe, except for limited use for manufacturing in non-defense industries under heavy restrictions. It just took action to block all exports of rare earths to Japan that could be also used for defense purposes. But the South China Post reports that Trump’s actions in Venezuela are partly about securing access to Venezuela’s vast reserves of rare earth minerals, even as China was taking steps to secure a partnership with the country. Venezuela’s southern Guayana Shield region has vast reserves of rare earths, along with gold, diamonds, iron ore and bauxite. China’s current monopoly over rare earths gives it the ability to choose global winners and losers in both manufacturing and in national defense, and access to supplies in Venezuela could help break that monopoly. They’re largely undeveloped, so it would take years before significantly impacting the global balance of power, but the rare earths are no doubt a factor.

Social media in China continues to actively talk about the Trump actions in Venezuela, believing that Trump gave China a blueprint for “reunification” of Taiwan to the Mainland – something that President Xi Jinping has assured his country will one day happen. China could very easily make that argument, although it is doubtful that its military has the same capability at this point to carry out such an operation. That is one reason why it continues to have periodic “war games” around Taiwan – to test out those capabilities. Xi recently removed several key generals in an anti-fraud campaign, so last week’s live fire war games around Taiwan were both a display of force and a test of military readiness. Chinese ground forces are not as tested as U.S. forces in hostile territory, although I’m sure Taiwan does not want to be the test case for assessing that. The bottom line here though is what is China’s perception? Does it see this as an option for reaching its objective. This remains the biggest potential flashpoint that could undo the October 30 handshake trade deal with the United States.

China bought another 10 cargoes of U.S. soybeans yesterday, according to our cash sources, with some saying the purchase may have been as large as 1 million metric tons. USDA confirmed 12.3 mmt, or a little over half of the total purchased this morning. Regardless, our cash sources indicate that this now brings total Chinese purchases over 10 mmt, versus USDA confirmations of more than 6 mmt. It’s looking more likely now that China will make the full 12 mmt commitment of soybeans as it honors the “truce” reached with President Trump on October 30, although the question still remains over when shipment of those soybeans will occur due to logistic issues at China’s ports. Meanwhile, Brazil’s harvest of cheaper soybeans is slowly gaining momentum.

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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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