Perspective: Morning Commentary October 28

By: Arlan Suderman, Chief Commodities Economist

Tue, 28 Oct 2025, 13:24

Today's Perspective Video: Are We Near a China Trade Deal?

October 28 – It’s day # 28 of the partial government shutdown. The ironic thing is that Wall Street seems to be adjusting to this reality, with no panic about when things might change, although there are certainly those who are directly impacted by the shutdown. Nonetheless, this week’s focus is on the Federal Reserve, which begins two days of meetings today, along with the ongoing negotiations to finalize a major trade deal with China by Thursday. And let’s remember that several other trade deals were signed with countries in Southeast Asia in recent days as well, including another rare earth minerals deal with Japan. Earnings season has gone well, and now Wall Street expects to get another rate cut from the Fed tomorrow. Stock futures firmed again overnight following yesterday’s record performance, while the VIX trades below 16 and the dollar index trades near 98.9. Yields on 10-year Treasuries are trading near 4.00%, while yields on 2-year Treasuries are trading near 3.51%. Crude oil prices are down by more than 1% on expectations that OPEC+ will again hike output when it meets, while the grain and oilseed markets are again led higher by soybeans on China trade deal optimism.

Wall Street puts a near 100% certainty on the Federal Open Market Committee cutting its benchmark interest rate by another 25 basis points when it concludes its October meeting tomorrow. That cut has already been baked into the market, along with expectations for yet another cut in December. That puts the focus on the Fed’s balance sheet. The Fed balance sheet swelled to roughly $9 trillion in the spring of 2022, reflecting the amount of Fed stimulus in the economy. That is a big part of what created inflation problems in our economy, along with several other factors. The Fed balance sheet was less than $1 trillion ahead of the Great Recession in late 2008, before it ballooned to $2.2 trillion by the end of that year as the central bank tried to stabilize the economy. A period of heavy business regulation followed, preventing that stimulus from creating inflation, giving the central bank confidence that it could stimulate without fear of inflation. It continued to stimulate off and on over the next few years, before trying to remove some of that stimulus in 2018 as the economy gained momentum due to the Trump tax cuts in his first administration. The Fed entered the pandemic with a balance sheet near $4.2 trillion. Not fearing inflation, it more than doubled its balance sheet in the months that followed, taking it to near $9 trillion by early 2022.

The Fed grows its balance sheet by purchasing Treasuries and mortgage-backed securities, which has the impact of injecting liquidity into the economy. In essence, it’s a way of printing money, but the central bank prefers to call it quantitative easing. Doing so created demand for Treasuries that funded massive congressional spending. The impacts of that government borrowing were limited due to near-zero interest rates. At one point the Fed was buying more than half of the debt certificates being offered, helping to keep interest rates contained. It shrinks the balance sheet by not buying new certificates as old ones mature, requiring increased buying from other sources – retail buyers, institutional buyers, foreign buyers, etc. – to keep interest rates from rising too fast. But the supply of debt certificates keeps rising, threatening to exceed the demand for them at times, which would put upward pressure on rates. Roughly half of the money available for investment has been going into debt certificates, limiting the amount available for investing in our economy, which in turn limits growth. As such, expect the Fed to take steps to halt shrinking of the balance sheet close to where it is currently at – near $6.6 trillion. This should act as a bit of a stimulus to the economy, while helping to keep interest rates contained – especially on the longer end of the curve.

Tensions with China ticked a bit higher over the past couple of days following two separate crashes of U.S. military aircraft in the South China Sea for unknown reasons in less than an hour of one another. No known reason for the crashes has yet been made public, China claims the international waters of the South China Sea as its own, while the United States continues to patrol the seas to keep them open for international shipping. Otherwise, the focus is on negotiating the details of the trade framework agreed to over the weekend so that an agreement can be signed by both President Trump and President Xi on Thursday. Soybean prices continue to work higher while waiting for those details, with speculative buying possibly intermingled with Chinese buying. Farmers have actively been selling into the rally in the grain and oilseeds markets, not trusting Chinese buying to match the hype around the deal. They remember how Chinese buying under the Phase One agreement reached just 58% of what China had committed itself to purchase. Estimates in the Chinese cash market vary between 5 and 10 million metric tons for immediate soybean needs to fill the gap ahead of the arrival of cheaper new-crop Brazilian supplies. That would certainly help the U.S. balance sheet, but it wouldn’t be enough to justify rationing demand with higher prices. Larger shipments than that are needed to provide longer term strength to soybean demand. Persistent rains in the North China Plain hurting corn quality and delaying winter wheat seeding may increase demand for those commodities as well, although China has other options to source those grains if it so desires.

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.

The views are current only through the date stated and are subject to change at any time based upon market or other conditions, and StoneX Group Inc. (“SGI”) disclaims any responsibility to update such views. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. Past performance does not guarantee future results.

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided.

References to certain OTC products or swaps are made on behalf of StoneX Markets, LLC (SXM), a member of the National Futures Association (NFA) and provisionally registered with the U.S. Commodity Futures Trading Commission (CFTC) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ and who have been accepted as customers of SXM.

StoneX Financial Inc. (SFI) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (SEC) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Advisor. StoneX Financial (Canada) Inc. (SFCI) is registered in Canada and is a member of CIRO and CIPF. References to certain securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to certain exchange-traded futures and options are made on behalf of the FCM Division of SFI. Wealth Management is offered through SA Stone Wealth Management Inc., member FINRA/SIPC, and SA Stone Investment Advisors Inc., an SEC-registered investment advisor, both wholly owned subsidiaries of SGI.

R.J. O’Brien & Associates, LLC (RJO) is registered with the CFTC as a Futures Commission Merchant and is a member of NFA.

StoneX Financial Ltd (SFL) is registered in England and Wales, company no. 5616586. SFL is authorized and regulated by the Financial Conduct Authority (FCA) (registration number FRN:446717) to provide services to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorized to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorized and regulated by the FCA under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorized by the FCA.

This communication is issued in the European Economic Area by StoneX Financial Europe GmbH (SFEG). StoneX is the trade name used by STONEX GROUP INC. and all its associated entities and subsidiaries. StoneX Financial Europe GmbH (“SFEG”) is a securities trading firm registered in Germany under Company No. HRB 80844.

StoneX APAC Pte. Ltd. (“SAP”) (Co. Reg. No 200616676W) is regulated as a Dealer (PS20190001002) under the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act 2019 for purposes of anti-money laundering and countering the financing of terrorism. SAP is an “Approved International Trading Company” authorized to act as a “Spot Commodity Broker” under the Commodity Trading Act.

StoneX Financial Pte Ltd (Co. Reg. No 201130598R) (“SFP”) is regulated by the Monetary Authority of Singapore and is a Capital Markets Service Licence holder (for dealing in capital market products), an Exempt Financial Adviser (for advising on investment products and issuing or promulgating analyses/ reports on investment products) and a Major Payment Institution (for domestic and cross-border money transfer services).

SFP may distribute analysis/report produced by its respective foreign affiliates within the StoneX Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations Recipients should contact SFP at (65) 6309 1000 for any matters arising from, or in connection with, this webinar.

StoneX Financial (HK) Limited (CE No.: BCQ152) (“SHK”) is regulated by the Hong Kong Securities and Futures Commission for Dealing in Securities and Dealing in Futures Contracts.

StoneX Financial Pty Ltd (ACN 141 774 727) holds an Australian Financial Service License (AFSL: 345646) for Dealing in Securities, Exchange-Traded Derivatives Contracts, OTC Derivatives Contracts and Foreign Exchange Contracts, and is regulated by the Australian Securities and Investments Commission.

StoneX Securities Co., Ltd. (“SSJ”) (Co. Reg. No 010401047199) is regulated by the Japanese Financial Services Agency as a Type-I Financial Instruments Business Operator (Kanto Local Finance Bureau (FIBO)No.291’), is a member of the Financial Futures Association of Japan for dealing and broking FX and FX Option transactions, and is a member of the Japan Securities Dealers Association for dealing and broking stock indices and option transactions.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

The report/analysis herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Satellite view of Earth at night showing illuminated cities across Asia and the Middle East

Discover more insights

Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.

Explore subscriptions

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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

Grains & Oilseeds

StoneX: We open markets

Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.

Reach

With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.

Transparency

As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.

Expertise

From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.