Perspective: Mid-Day Commentary for September 4

By: Arlan Suderman, Chief Commodities Economist

Thu, 04 Sep 2025, 17:04

Today's Perspective Video: China and Courts Fight Back Against Trump Tariffs

September 4 - Stocks slowly firmed this morning, led by the tech sector, despite this morning's data showing some more softening of the jobs market. Traders are fully convinced now that we will see a rate cut from the Federal Reserve in two weeks, which means that bad news is good news in the eyes of Wall Street traders. The VIX slipped back below 16 during the morning, while the dollar index trades near 98.4. Yields on 10-year Treasuries are trading at a fresh four-month low near 4.18%, while yields on 2-year Treasuries are setting their own new four-month low near 3.59%. Crude oil prices are modestly lower, but coming off their lows, while the grain and oilseed sector has a mixed to weaker tone to it.

Soybean prices slipped to fresh lows for the move today - the lowest since the August 12 report in which USDA shocked the trade with a 2.1 million acre reduction in planted area for the crop. Prices continue to erode lower on the absence of a final ruling of SRE offsets to the RVO, as well as a final ruling on credits for imported feedstock. But the bigger factor is the lack of export demand from China. Our cash sources suggest that China has nearly completed booking its September and October import needs. That's a period of time in which China imported more than 250 million bushels of U.S. soybeans last year, and that was down from previous years. That's business that we won't get back. USDA's export target for the 2025-26 year is 1.705 billion bushels, down from 1.875 billion in the year that ended August 31, although I believe that number will be pushed up towards 1.890 billion bushels. So, you could argue that USDA has already accounted for that lost business. The problem is, we still do not have a trade deal with China, and new talks are not expected until late October or early November. It's always possible that we could see China make purchases in the meantime, but we currently see no evidence of it. China imported 841 million bushels from the United States in the 2024-25 marketing year. It is physically possible for it to go through the next year without purchasing a bushel if it chooses to utilize its reserves, when combined with South American soybeans. That may depend on the upcoming growing season, with planting just getting started in Brazil currently. That doesn't mean that U.S. exports would drop by 841 million bushels, as China would likely squeeze some smaller customers out of the Brazil market who would end up coming to the States, but there is still significant downside risk to U.S. exports for the current year.

M2 money supply measures how much cash is in the economy that is relatively fluid, including money in currency, checking accounts, travelers checks, savings accounts, small denomination CDs, and retail money market funds. M2 hit a record high $2.1 trillion in August, up from just below $22 trillion in July. That's a tremendous amount of spending potential if we ever remove the "uncertainty" from the economy. Removing that uncertainty would likely trigger businesses to take advantage of the stimulus in the tax bill to expand, increasing employment, which then increases consumer sentiment. That's the risk for central bankers when they meet in two weeks. Do they lower interest rates at a time when money supply is record high and expansion incentives are high for business on the risk that President Trump removes "uncertainty" from the economy next year ahead of the mid-term elections? Lower interest rates probably make sense as long as uncertainty remains high, but the latter is an unknown that remains in Trump's hands.

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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

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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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