Perspective: Morning Commentary October 7

By: Arlan Suderman, Chief Commodities Economist

Tue, 07 Oct 2025, 13:28

Today's Perspective Video: Government Shutdown, OPEC Moves & China Trade Hopes

October 7 – It’s day #7 of the partial government shutdown. The headlines continue to flow regarding the political deadlock in Washington, and how harmful it is to the economy, but stocks continue to grind higher with new record highs. Momentum may be slow, but the slow grind remains higher built on expectations that the Federal Reserve will sustain an active rate cut cycle when it meets later this month. The VIX is trading near 16 this morning, while the dollar index trades near 98.5 as it tests the upper end of the trading range that has largely contained it over the past six to eight weeks. Crude oil prices traded modestly weaker this morning, while the grain and oilseed markets were mixed to firmer ahead of this morning’s pause in trading.

The government is closed, limiting the amount of data flowing into the commodity and equity markets, while China remains closed for a weeklong holiday. That limits the headlines available to drive trading, leading the markets to lean more on technical signals and momentum. We occasionally get a headline from President Trump to drive trading action, which has generally been supportive in recent days for the commodity sector, while equity traders remain locked in on rate cut hopes amid a lack of data releases to tell them otherwise.

Gold prices continue to ride momentum higher amid the larger picture of uncertainty, seeking a record high of $4,000 per ounce. The precious metals sector has been the highest performing sector over the past 12 months according to our StoneX commodity index tracker. The precious metals sector was up 46.1% year-on-year at the end of September, leading all other commodity sectors. The livestock sector was a distant second at a solid 24.7% year-on-year gain. The next closest sector was the softs at just a 2.1% gain. The grain and oilseed sector continues to struggle, being down 5.3% year-on-year at the end of September, with industrial metals down 1.0%. The energy sector posted miniscule 0.4% gains. Put it altogether, and our composite basket of 27 commodities gained 7.2% year-on-year through the end of September. There’s been increased talk of inflation on Wall Street, and that has some data to back it up. However, the commodity sector as a whole is not yet showing that typical tendency, outside of the previous metals and livestock.

Commodity prices benefit from a weaker dollar, but the greenback’s slide came to a halt late summer as the slide in Treasury yields slowed, and as competing currencies encountered weakness. The euro is the dollar’s greatest competitor, but it faces growing uncertainty in Europe as reflected by the political chaos currently seen in France. Pressure mounted today on French President Macron to either step down or to call another snap election after the past five administrations appointed by Macron failed to create a legislative coalition needed to run the government. Meanwhile, the Japanese yen is under pressure amid political challenges in Japan. Sanae Takaichi is expected to become Japan’s next prime minister. She campaigned on promises to aggressively increase spending, while criticizing the Bank of Japan for raising interest rates. The combination of a weaker euro and weaker yen makes it difficult for the dollar to sustain a weaker trend needed to help demand for commodities overall in the near-term, and risks sending the dollar back higher again if these problems escalate.

Crude oil prices recently hit four-month lows amid the move by OPEC+ to grab market share away from North American shale oil producers at a time when a sluggish global economy continues to keep demand growth soft. One bright spot on the demand front has been Chinese buying, as it continues to stockpile reserves at a time when supplies are relatively cheap. China sees how the United States cut its reserve supplies in half in recent years at a time when geopolitical tensions are continuing to escalate. As such, it continues to take advantage of the sanctions of the West that have forced Iran and Russia to sell oil cheap on the dark market to build its reserves. Reuters reports that state oil companies are adding at least 169 million barrels of storage at 11 different sites in 2025 and 2026, allowing China to store two weeks worth of crude oil imports. It’s estimated that China stockpiled an average of 530K barrels per day thus far this year, with the stockpiling expected to continue into 2026 as well. This would help China avoid shortages should it face sanctions of its own connected with a move on Taiwan or other conflict.

USDA suspended Thursday’s WASDE crop report until further notice due to the partial government shutdown, but pre-report industry estimates were collected anyway. They reflect expectations that the corn yield fell another 1.7 bushels to 185.0 bushels per acre, while the soybean yield fell 0.3 bushel to 53.2 bpa. Trade expectations put ending corn stocks at 2.231 billion bushels, suggesting that USDA will not fully account for last week’s higher corn stocks by lowering old- and new-crop feed usage. Soybean ending stock estimates remained at 299 million bushels, which totally ignores the fact that we’ve already missed out on over 300 million bushels of Chinese demand.

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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: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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