Perspective: Mid-Day Commentary for August 20

By: Arlan Suderman, Chief Commodities Economist

Wed, 20 Aug 2025, 18:26

August 20 - Stocks continue to slip lower today as Wall Street prepares for Federal Reserve Chair Jerome Powell's final Jackson Hole Symposium speech on Friday morning. It's widely expected that Powell will be replaced as chair by President Trump, with Trump's nominee for the position expected to be announced soon. The relationship between Powell and Trump has been very tense, with Trump trying to influence the central bank toward lower interest rates that would stimulate the economy while lowering Federal debt servicing costs. The Federal Reserve just released the minutes of its July meeting, showing that the two dissenting votes to the policy at that time were the only ones arguing for lower interest rates - a disappointment for Wall Street.

The tech sector continued to lead the way lower for stocks today, with the VIX slowly creeping upward toward 17. The dollar index is trading near 98.2. Yields on 10-year Treasuries are trading near 4.29%, while yields on 2-year Treasuries are trading near 3.74%. Crude oil prices are bouncing by more than 1% today as they consolidate back above $63 per barrel, while the grain and oilseed sector is mixed to firmer. Grain and oilseed prices are largely consolidating within their recent trading ranges. Wheat prices are consolidating near contract lows as U.S. wheat fights to remain competitive on the global market. Russian exports continue to lag expectations due to slow farmer selling, but that may pick up in the weeks ahead as production estimates creep higher. Yet, quality / logistics issues in Europe / Black Sea continue to support demand for U.S. quality milling wheat at these low price levels.

Corn and soybean traders continue to monitor the Pro Farmer Midwest Crop Tour. Tour scouts are moving through the best parts of the Midwest today and tomorrow. Yes, they're finding occasional problems, but no big surprises thus far. The first two days of the tour produced yields generally below USDA, but that's not unusual, due to the routes focused on by the scouts, and the methodologies followed relative to USDA's more comprehensive way of doing things for its reports.

As such, Pro Farmer results are best compared with previous year's numbers to get a sense of how the crops are performing. I included tables below showing how Pro Farmer's August yield estimates compared to USDA's final yield numbers published in January going back to 2012 - minus the pandemic year of 2020. Note that Pro Farmer's corn and soybean yields came in below USDA final yields in 75% of those years. Averaging all years together in that span resulted in Pro Farmer coming in roughly 3.2 bushels lower than USDA's final yield for corn and about a bushel lower for soybeans. For its part, the trade is looking for any indication that the crops are bigger than what has already been priced into the market. It's too early to say for soybeans, but for corn, I don't see anything yet to indicate that it is any bigger, which would allow traders to start focusing on the demand side of the ledger going forward. Does that mean that the corn market put its harvest low in following last week's USDA report? Maybe, but that's also assuming that we don't get any more surprises.

But a bottom in the futures market doesn't necessarily mean a bottom in flat cash prices. The cash market will tell the real story of the pain in farm country over the next few months as this year's big crops seek a home. Farmers will want to store much of this year's crops, hoping for a rebound in prices as we go through the marketing year. But there will not be enough storage for this year's big crops, especially since the farmer has generally sold less of the upcoming harvest than normal due to this year's low prices. The problem is aggravated by the lack of Chinese buying this year - especially for soybeans. Some buyers focus primarily on the rail market for reselling soybeans that they purchase from farmers. The possibility of not selling soybeans to China this year makes them reluctant to commit to purchases from farmers. Other buyers are worried about not having enough storage space available. Processors largely have much of their early needs already purchased in some regions. As such, we're already seeing some buyers communicate to farmers that they will have limited to no interest in taking in soybeans in particular for storage, with corn and wheat being the priority for storage this year. What does this mean? The cash market manages supply and demand in the basis market, so even though the futures market "may" have found a bottom, that doesn't mean that the cash market has found a bottom. It may continue to fall in the weeks ahead.

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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: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

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