Talking Points:
Here are the take-home points from Suderman’s comprehensive analysis, available for streaming
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The USDA's latest report confirms abundant supplies of corn, soybeans, and wheat:
These figures suggest comfortable supply levels, and Suderman's detailed breakdown of production estimates and market dynamics offers valuable insights for traders and producers alike.
While U.S. and South Russian wheat yields are exceeding expectations, Suderman emphasizes the need to monitor Black Sea spring wheat and corn production closely. This region's output could significantly impact global supply dynamics, making it a crucial factor for market participants to watch.
Suderman highlights a significant change in the inflation outlook.
A strong correlation (0.87) exists between the StoneX Commodity Index and both inflation expectations and U.S. CPI Year-over-Year.
This shift in perspective could have far-reaching implications for commodity markets and economic policies, which he explores in depth during the July Outlook.
As a result of the changing inflation outlook, Suderman identifies an emerging commodity deflation fund trade in the near term. This trend could significantly influence market dynamics and trading strategies.
Despite ample supplies, Suderman cautions that balance sheets are not immune to weather problems. He provides a comprehensive analysis of current weather patterns and their potential impacts on crop production, including:
Understanding these weather risks is crucial for accurately assessing potential market movements.
Given the vulnerability of balance sheets to weather issues, Suderman emphasizes that weather patterns remain the primary focus for commodity markets in the near term. He offers in-depth analysis of:
Suderman's Outlook provides a wealth of information for anyone involved in commodity markets or agricultural production. From detailed supply and demand figures to expert analysis of weather patterns and economic trends, this presentation offers valuable insights to help navigate the complex world of commodities. For a more comprehensive understanding of these critical factors and their potential market impacts, listen to the full July Commodity and Economic Outlook.
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Dry soil is slowing winter wheat planting in Russia and Ukraine, with a third of Ukraine's area in moisture deficit. Lost export revenue and costly diesel add a second risk to the size of the next Black Sea wheat crop.
September 23 – The Nasdaq hit another fresh all-time high yesterday, with the S&P 500 close to doing so as well, though stock futures are pointing to a quietly lower start to today’s session after surging higher to start the week as optimism surrounding this week’s various diplomatic pushes abounds. That optimism continues to be reflected in the VIX, continuing to hang around roughly three-week lows, trading at 14.3 this morning. The dollar is surging higher, adding to the week’s gains, as it nears the 101 mark for the first time in nearly two months. Treasury yields are off to a higher start, with 2-year yields back up to 4.80%, 10-year yields at 4.99%, and 30-year yields just above 5.32%. Crude oil prices are looking to hold their ground after a steady decline since late last week, with nearby WTI up 1.3% to trade near $91 and nearby Brent up 1.4% to trade near $100.65 at the time of writing. The ags are mostly lower to start the day, likely influenced in part by managed money selling off some existing length amid hopes for improvement regarding commodity flow through the Black Sea as part of this week’s diplomacy blitz.
September 22 – The Nasdaq and S&P 500 both closed within 1% of their all-time highs yesterday, with stock futures pointing to a quietly higher open at the time of writing. Diplomacy continues to be the theme of the week, with markets pricing in optimism, particularly in the tech sector following encouraging results from the weekend’s meeting between U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. It’s also worth noting that Bessent yesterday announced the two sides would be meeting again to discuss AI safety and communication protocols in Shenzen, China in about two months, another potential sign of cooperation instead of escalation. The VIX continues to reflect optimism regarding this week’s various diplomatic pushes as it hovers near its lowest level since early September, starting the day trading just below the 14.7 mark. The dollar is sitting just above unchanged, near 100.46 at the time of writing, touching a fresh two-month high earlier this morning. Treasury yields are quietly lower to start the day, also helping bring some calm to Wall Street, with 2-year yields at 4.747%, 10-year yields at 4.949%, and 30-year yields at 5.279%. Crude oil prices continue their push lower, with nearby WTI down another 1.8% to trade near $90.30 and nearby Brent down 1.6% to trade near $98.70, both roughly two-week lows. The ags are looking at a turnaround Tuesday to kick off the session with most of the complex in the red at the break, led down by the wheat complex. Improving forecasts for planting conditions for the U.S. winter wheat crop are likely having some influence, but I’d also point out the signs of potential increasing U.S. pressure on Ukraine, which we’ll dive into in more depth below, possibly spooking out some managed money length.
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