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Perspective: Morning Commentary February 18

By: Arlan Suderman, Chief Commodities Economist

Guest Commentary by Matt Zeller

Market Intelligence – Senior Grains Analyst

February 18 – The Dow Jones Industrials are pointing to a third straight minor gain today, looking upward though remaining off last week’s record highs (and below that magical 50k mark). The S&P and tech-heavy NASDAQ are seeing stronger percentage gains heading into the open, as traders’ fears over the future of AI wane a bit and overall optimism remains high in the equities markets. The trade will be looking forward to the release of the January Fed minutes this afternoon to see if projections for a couple of interest rate cuts later this calendar year remain accurate. Ten-year treasury yields ticked higher this morning to 4.06%, with the U.S. dollar index slightly higher as well, and gold and silver rebounding from yesterday’s losses.

Plenty of economic data is on tap this morning, not to mention for the remainder of this week; that was kicked off by MBA mortgage applications for the week ending February 13, up 2.8% week-over-week for the best reading in four weeks. Purchases fell 2.7% while refinancings rose 7.1% on the week as the average 30-year mortgage rate moved lower to 6.17% - just a tick above January’s 16-month low. December durable goods orders fell 1.4% on the month, down from a +5.4% in Nov, though that beat the average -2.0% trade estimate. December housing starts beat expectations as well at 1.404 million, a full 100k above the trade guess thanks to a broad-based increase, with building permits also beating the 1.4 mln trade guess at 1.448 mln for Dec. Industrial production is on the way later this morning with the FOMC minutes released at 1 PM central time this afternoon.

WTI crude oil is on the mend this morning, up over $1.50 per barrel as of the time of this writing after bottoming out around the $62/bbl mark yesterday. The “geopolitical risk” arrow is pointing upward today with peace talks between Ukraine and Russia ending abruptly, and talks between the U.S. and Iran stalling out while the country temporarily shut down the Strait of Hormuz for military drills. The trade sees rising U.S. crude stocks and falling distillate and gasoline inventories when the delayed weekly DOE reports hit tomorrow morning.

Soybeans and soybean oil continue to garner the attention of the grain market bulls with the former re-approaching government-shutdown-fueled highs and the latter at a multi-month spot top; the trade will look to the USDA Ag Forum tomorrow (for what it’s worth) to at least see what the government is using for starting points for acreage and yields. Soybeans in particular will face potential stocks tightness, IF China buys that additional eight million tonnes of U.S. soybeans, IF record domestic crush paces continue, and IF the market is unable to secure additional acres in 2026. Wheat gains are notable this morning, however, on global crop concerns; Ukraine farmers unions are warning of damaging cold and an ice crust hitting winter crop potential, while winds and fires rage through the southern U.S. Plains with moisture severely lacking. Wheat fields and livestock will continue to be at risk today with temps remaining warm and winds high, and burning bans in place throughout the central U.S….

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This material should be construed as market commentary and represents the opinions and viewpoints of the author, and does not reflect tailored advice associated with any specific account.


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