Perspective: Morning Commentary October 22

By: Arlan Suderman, Chief Commodities Economist

Wed, 22 Oct 2025, 13:26

Today's Perspective Video: Soybeans Rally on China Trade Hopes

October 22 – It’s day #22 of the partial government shutdown, and stock futures were again very quiet overnight as they consolidated modestly lower just below recent record high levels amid solid third quarter earnings reports and supported on hopes of a trade deal with China next week on top of hopes for another rate cut from the Federal Reserve next week. A lot is currently riding on next week’s hopes and anticipations for both the commodities and the equities. The VIX is trading near 18 this morning, while the dollar index is trading near 99.1 as it continues to firm. Yields on 10-year Treasuries are trading near 3.97%, while yields on 2-year Treasuries are trading near 3.46%. Crude oil prices are 2% higher on the above optimism, while the grain and oilseed markets were mixed to firmer.

Wall Street anticipates a meeting between President Trump and China’s President Xi next week when they both attend the APEC conference in South Korea. But we still have no confirmation that such meeting will take place. Even President Trump has left the door open for the possibility that the meeting won’t take place, let along a trade agreement. We continue to hear that Treasury Secretary Bessent will meet with China’s Vice Premier in Malaysia to negotiate an agreement ahead of next week’s meeting, but the only confirmation of the timing of such meeting that we can find is in the Malaysian press, suggesting that it will take place on Saturday and Sunday.

The anticipated meetings are one of the primary focuses here in the States, but Chinese leaders are currently focused on other issues. They’re focused on this week’s meeting of the Fourth Plenum, or the 15^th Five-Year Plan development by the Chinese Communist Party. But this is more than just a strategic planning retreat. It is a political convention at which the top 270 members of the CCP gather to assess the direction of the country, while determining next steps to reach their long-term goals and objectives. It sometimes results in changes in leadership at different positions, or role responsibilities. While we still do not expect a change in the party’s top position, although that can’t be ruled out, this week’s event will provide President Xi with a sense of the strength of his power base. And that is expected to impact how he approaches the anticipated meeting with President Trump next week. He may take a stronger stance against President Trump if he feels that his power base is secure, but he may be interested in a quick deal to calm the international relations to focus on domestic issues if he senses weakness in his power base. That’s likely why we haven’t heard much out of China regarding next week’s potential meeting in South Korea. The current focus on China is on this week’s meeting of the CCP. A confident Xi coming out of these meetings – they have one more day on Thursday – and the advanced negotiating meeting in Malaysia could even be cancelled. A concerned Xi regarding his power base could see negotiating progress rapidly unfold this weekend, with a deal announced next week. We likely won’t hear much coming out of this week’s meetings, but the events of the week that follow could tell us more about what is happening in China. My current bias is that Xi is fine with his power base, but we’ll see what unfolds over the coming week.

The other primary issue being followed on Wall Street revolves around next week’s meeting of the U.S. Federal Open Market Committee. The CME FedWatch puts 97% odds on expectations that the Fed will cut its benchmark interest rate by another 25 basis points next Wednesday, with similar odds that we’ll see an additional cut at its December meeting. One obstacle to those expectations would be if inflation were to heat up more than expected. The Bureau of Labor Statistics has said that it will release its monthly inflation data – the consumer price index – on Friday as scheduled, giving the Fed key inflation data ahead of its decision. As such, we could see some market volatility on Friday, depending on what those numbers indicate. Higher than expected inflation could raise fears of a Fed pause in the rate cuts, while tamer than expected inflation could bolster rate cut expectations even further. The Cleveland Fed’s inflation model currently projects headline September inflation at 0.38% on the month and 2.99% year-on-year. Core inflation that excludes the more volatile food and energy sectors is expected to come in at 0.26% on the month and 2.95% on the year. Those numbers are well above the Fed’s 2% mandate, but that doesn’t seem to matter to the Fed as long as they don’t see significant escalation, due to their current focus on the jobs market.

Grain and oilseed prices posted modest gains overnight as the Trump Administration talks optimistically regarding next week’s anticipated meeting between Trump and Xi. Soybeans struggled to hold their gains in the wake of technical selling in corn yesterday, but buyers returned again on the China rhetoric overnight. The partial government shutdown again means that we do not expect to get any export sales data tomorrow, keeping us in the dark on that. We are now running out of time for the November WASDE crop report to occur on time. Failure to reopen the government by next week would suggest that the November report might need to be delayed, or even cancelled, if we fail to get the government reopened soon. USDA has never cancelled back-to-back reports.

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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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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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