Perspective: Morning Commentary November 6

By: Arlan Suderman, Chief Commodities Economist

Thu, 06 Nov 2025, 14:39

Today's Perspective Video: China Cuts Tariffs

November 6 – It’s day #37 of the partial government shutdown, and yet the sun rose once again over Wall Street this morning, which doesn’t seem to be too concerned yet at this point. That may change now that flights are being cancelled ahead of the Thanksgiving holiday travel season, but for now, no movement is seen in Washington. Stock futures posted modest gains this morning, after trading both sides of unchanged overnight. The VIX is trading near 18 this morning, while the dollar index is trading near 99.9. Yields on 10-year Treasuries are trading near 4.11%, while yields on 2-year Treasuries are trading near 3.58%. Crude oil prices tried to bounce overnight, after falling below support near $60 per barrel yesterday, but they’re struggling to sustain gains at this point. The grain and oilseed sector traded mostly lower overnight as the China trade deal encounters a few bumps on the road.

U.S. Transportation Secretary Sean Duffy ordered a 10% reduction in flights at 40 of America’s busiest airports late Wednesday to ease safety concerns in the wake of the partial government shutdown. Flight delays and cancellations have become a regular part of travel since the shutdown began on October 1. Air traffic controllers are not being paid during the shutdown, requiring many of them to seek other employment to pay their bills. That creates staffing issues, requiring a reduction of flights to enable existing flight controllers to maintain safety standards with the staff that they have available. The move gave airlines 36 hours to adjust flight schedules while working with ticketed passengers to adjust their travel schedules. The move comes just ahead of the Thanksgiving holiday travel period – the busiest of the year for travel. Yet, the filibuster on the Senate floor continues to prevent the funding bill from even reaching the floor for debate and for a vote.

China’s trade negotiator met with a U.S. Ag trade delegation in Beijing on Tuesday, telling them that U.S. unilateral tariff measures were the root cause hindering trade. In other words, it seemed that he was implying that the remaining 10% fentanyl tariff was a roadblock toward China removing the remaining 10% retaliatory tariff from U.S. products. This dispute remains a significant roadblock to China adhering to the agreement reached last week in South Korea, with the clock ticking on China’s ability to meet its obligations for the 2025 calendar year. The White House stated that China committed to purchasing 12 million metric tons of U.S. soybeans in 2025, with another 25 mmt in each of the next three years. That 12 mmt is critical to making the 2025-26 marketing year balance sheet work, since it already has an abundance of Brazilian soybeans booked for shipment after that. Without that demand in the current marketing year, the balance sheet becomes bloated. With it, demand keeps supplies snug. China has an abundance of cheaper new crop Brazilian supplies scheduled to arrive starting in February, so the opportunity to sell them U.S. soybeans is a narrow window over the next 60 days. Our cash sources suggest that China already has 20% of its needs covered for December and January arrivals, leaving roughly 8 mmt of demand yet to fill. China’s state buyers have reportedly purchased eight cargoes thus far, which is just 5% of the 12 mmt.

China’s soybean demand is also in decline. Declining crush margins are slowing crusher interest in soybean purchases. Soybean meal stocks at major crushing plants stand at 106K mt, up 12% year-on-year due to slower feed demand. Soybean supplies are backing up at the ports. China’s leading hog producing corporations are liquidating a portion of their herds due to declining demand, reducing feed demand in the process. Muyuan is China’s largest pig producer. It sold 7.08 million pigs in October, up 27% on the month, and up 13% year-on-year. China’s second largest producer is Wens. It sold 3.9 million pigs in October, up 46% on the year and its highest monthly total in a year as it reduces inventory. Reduced demand for pork meant that Muyuan sold its pigs for a price that was more than 32% lower than the previous year. Muyuan reduced its breeding herd by 10% from mid-year to the end of September in response to the weaker demand. All of this contributes to a weaker demand outlook for feed, including corn and soybean meal. And that raises headwinds for China keeping its obligation to purchase 12 mmt of U.S. soybeans in the current calendar year. Private crushers have zero incentive to purchase U.S. soybeans at current price levels, and China’s state buyers are being slow to do so as well.

Headlines continue to set the tone in both the grains and proteins. Yesterday’s gains on China’s 10% reduction in tariffs are becoming today’s losses – at least to start the day – on the realization that U.S. commodities still have significant obstacles to overcome before seeing any meaningful demand go into China. We’ve seen some cargoes of soybeans and soft wheat sold to China, but not yet enough to make a substantial difference, and the deal still hasn’t been signed. Farmers are nervous, and they’re selling incrementally into the recent rally, also creating challenges to sustaining this upward price move. It doesn’t mean that all is lost on the demand side, but it does mean that the market finds itself searching for the next headline to sustain the move.

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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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