Perspective: Morning Commentary December 29

By: Arlan Suderman, Chief Commodities Economist

Mon, 29 Dec 2025, 14:14

Today's Perspective Video: Ukraine War Escalates, Raising Risks for the Markets

December 29 – There are three trading days left in 2025. Will this year’s version of the Santa Claus rally gain momentum during those days, or will Santa fall flat faced in the snow? Optimistic rhetoric coming out of President Trump’s meeting with Ukraine’s President Zelenskiy provided some support overnight, but that was countered by rapidly escalating tensions around Taiwan that risks a broader conflict. Year-end portfolio balancing will also be a factor in relatively thin holiday trade volume over the next several sessions before the markets close for the New Year’s Day holiday on Thursday. Stock futures traded mixed to weaker overnight, consolidating near record highs, while the VIX traded back above 14, although still near last week’s one-year lows. The dollar index is trading near 98.1. Yields on 10-year Treasuries are trading near 4.11%, while yields on 2-year Treasuries are trading near 3.46%. Crude oil prices fell sharply Friday as President’s Trump and Zelenskiy prepared to meet, but they bounced notably in the wake of that meeting. The grain and oilseed markets were mostly weaker overnight.

President Trump stated Sunday that he and Zelenskiy are “getting a lot closer, maybe very close” to an agreement to end the war with Russia that has lasted nearly four years that has likely cost hundreds of thousands of lives, although both sides treat actual death toll numbers as a state secret. Crude oil prices tumbled on Friday on the possibility of peace, but then they rebounded Sunday night following Trump’s report of a successful meeting. We’re likely closer to a peace deal now than we’ve been in the past four years, but that doesn’t mean that we’re close to a deal. Russia hasn’t committed yet, and President Putin has a tendency to move the goal posts. To be sure, both Trump and Zelenskiy admitted Sunday that some of the thorniest issues have yet to be dealt with. The implications of the commodity markets are notable. For much of the war, both sides tried to allow the flow of food and energy commodities to move out of this commodity-rich region uninterrupted. But now, they’re becoming the focus. Ukraine continues to strike significant energy infrastructure in Russia – both at the ports as well as deep inland. Those strikes are threatening Russia’s ability to export crude oil and products. As for Russia, it has intensified its strikes on Ukraine’s energy infrastructure, and on its commodity export network, with Odessa said to be operating at close to 20% capacity, if that. Putin has even made threats regarding hitting ships of countries supporting Ukraine. Commodities are still flowing, but they’re also increasingly the focus of this war. Continued escalation could threaten that flow, while an actual peace agreement could yield a fire-sale.

China and the United States agreed to soften the tone and ease tensions when President Trump and President Xi met on October 30 in South Korea. That allowed rare earth minerals to flow to the United States, with notable restrictions, while soybeans and other commodities flow to China – at least they’ve been purchased on the hopes that they’ll flow. Taiwan is one of those potential black swan flashpoints that could make the deal fall apart, potentially leaving soybeans and other purchased commodities unshipped. President Trump tried to calm Chinese fears by easing the rhetoric on Taiwan, but Japan ruffled China’s feathers when its new Prime Minister Sanae Takaichi suggested that it might support Taiwan’s defense should China make a move on the island nation. China insisted that she retract her statement, and she refused to do so. The war games exercises also come just 11 days after the United States announced $11.1 billion in arms sales to Taiwan to help it protect itself.

China moved army, air force and naval forces around Taiwan today, promising to do live fire drills tomorrow. This largest-to-date war games exercise is labeled “Justice Mission 2025” by China, and it is designed to not only intimidate Taiwan, but to also demonstrate how China can cutoff Taiwan from supporters in the West. The actions are aimed at testing combat readiness while sending a “stern warning” against moves toward Taiwan independence. So, while I’m much more optimistic about China’s commitment to purchase 12 million metric tons of U.S. soybeans in the current marketing year, it does come with risks, with the greatest risk being that everything falls apart over China’s determination to not allow any other nation to say that it cannot take control of Taiwan. “Reuniting” Taiwan to the Mainland is a nonnegotiable issue to China. It’s willing to give up a lot to make sure that happens.

A widespread rumor in China is that the government may release up to 7.25 million metric tons (266 million bushels) of 2017 wheat from its reserves starting in January. It’s estimated that 60% of this older wheat will end up in livestock feed, displacing corn demand. This, combined with escalating tensions with China outlined above, and prospects for peace in Ukraine, weighed on grain and oilseed prices overnight. That said, it’s difficult to read too much into either the pre-Christmas strength, or the post-Christmas weakness until we get into more “normal” trading volume next week. Heavy rains will likely slow early soybean harvest progress in Brazil over the next 10 days, although things do dry out some beyond that point. End-of-the-year book squaring will also be a factor.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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