Perspective: Mid-Day Commentary for August 19

By: Arlan Suderman, Chief Commodities Economist

Fri, 19 Aug 2022, 15:08

Perspective: Midday Commentary

Arlan Suderman

Chief Commodities Economist

August 19 - Rate hike risks continued to haunt Wall Street this morning, with the tech sector leading the way lower for stocks. The VIX is trading near 21 at this hour, while the dollar index is trading at five-week highs above 108.1. Yields on 10-year Treasuries are trading near 2.99%. Crude oil prices are modestly higher, while the Ags are mixed. Wheat prices firmed on a technical bounce, while traders also monitor growing tensions surrounding Europe's largest nuclear plant in southern Ukraine. Corn prices firmed on crop concerns, while soybeans pulled back on spread trading, with traders thinking that the oilseed may be handling this month's weather better than corn, while also concerned about soft Chinese demand. Lean hog futures are following the product market lower in fund selling, while strong cash cattle prices support that market.

So, what is the size of this year's corn and soybean crop? That's the key question before the markets as we approach next week's Pro Farmer Midwest Crop Tour. That question takes a more challenging twist in light of recent years when the crop's seemed to weather adversity better than expected, thanks to modern seed genetics and technology. USDA currently forecasts the corn crop to come in a little below trend yields, with the soybean crop a bit above. That is expected to result in corn ending stocks declining to a 9.6% stocks-to-use ratio, while soybeans creep slightly higher to 5.4% of anticipated usage. Neither provides much margin for error. The market is skeptical that we will see a significant supply shortfall, but it will breathe a lot easier once the harvest verifies such.

Look for the crop tour to find some very good crops out there, while also finding some significant problem areas. That's fairly normal. The question typically revolves around how the two balance each other out. The crop tour should provide a better feel for that. However, as a former agronomist, the factor that has my focus this year is seed size. The crop tour will assume "normal" seed size when it calculates yields, for consistency purposes. The data shows that 52% of the Corn Belt has received 75% or less of normal rainfall this month thus far, with 34% receiving less than half of normal rainfall. Keep in mind that many of the areas seeing below-normal rainfall this month did so on already dry soils, as the pattern has largely been in place for some weeks. The dry bias is greatest west of the Mississippi, where 69% of the region saw 75% or less of normal rainfall this month, with 51% seeing less than half of normal rainfall and 19% at 25% of normal or less. That's the 8th driest August to this point since 1979 for the western Midwest. Furthermore, 97% of this region has seen above normal temperatures to this point - not extreme heat, but above normal. That combination would suggest smaller seed sizes overall for the corn crop, and the same "may" be true for soybeans as well IF the pattern holds over the next several weeks. Nearly a third of the eastern Midwest has also been dry this month, but temperatures have largely averaged near normal month-to-date. The graphic below shows the outlook for September as the crops move into maturity. The heat isn't extreme and it won't be totally dry, but again, the bias continues to favor smaller seed size, which shows up once the combines roll.

September temperature and rainfall outlook leans warm & dry for Ag Belt. SOURCE: ECMWF, WeatherBELL & Nutrien Solutions

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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: 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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