Perspective: Morning Commentary for April 12

By: Arlan Suderman, Chief Commodities Economist

Wed, 12 Apr 2023, 13:35

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 12 – Today’s focus is on inflation and the Federal Reserve. We saw fresh inflation data at the consumer level released this morning, and the Federal Reserve will release the minutes from its March policy meeting this afternoon, giving more insight into the discussions taking place behind closed doors that will impact our economy. The VIX is trading below 19 this morning, while the dollar index is trading near 101.6. Yields on 10-year Treasuries are trading near 3.37%, while yields on 2-year Treasuries are trading near 4.01%. Crude oil prices are modestly higher at 10-week highs after a strong day on Tuesday, while the grain and oilseed markets are mixed to higher in early trade. Energy and grain and oilseed prices were generally higher on this morning’s inflation data release as recession fears eased.

The consumer price index rose 0.1% month-on-month in March, down from 0.4% in February and below analyst expectations of 0.3%. The CPI was up 5.0% year-on-year in March, down from 6.0% in February and below analyst expectations of 5.2%. The core CPI that excludes the more volatile food and energy costs was up 0.4% month-on-month in March, down from 0.5% in February, but matching analyst expectations. The core CPI was up 5.6% year-on-year in March, up from 5.5% in February and matching analyst expectations. At first glance, the headline number impressed Wall Street, showing cooler inflation than the previous month and cooler inflation than analysts expected in March. That’s a good thing, suggesting that the Fed’s rate monetary tightening to this point is doing its job, and that inflation is in the process of being tamed. Perhaps that will allow the Fed to pivot sooner than anticipated. Stocks rallied on the data release based on that expectation.

But is that really the case? Today’s good March CPI numbers were largely the product of collapsing energy prices in March, combined with falling demand for used cars. Declining used car prices might reflect problems in the economy, except new car prices were rising, suggesting a shift in demand away from old to new cars. Gasoline prices fell 4.6% month-on-month in March, and they are down 17.0% year-on-year. Fuel oil saw similar declines, while natural gas prices fell 7.1% month-on-month. But falling energy prices are temporary. We only need to look back to last week on Monday when the crude oil market gapped sharply higher on the OPEC+ announcement of a production cut to see what we can expect once demand returns. However, inflation pressures remain strong in the service, shelter, transportation, and food categories. Services less energy were up 0.4% month-on-month and up 7.1% year-on-year. Shelter was up 0.6% month-on-month and 8.2% year-on-year. Transportation was up 1.4% month-on-month and 13.9% year-on-year. Food consumed away from home was up 0.6% month-on-month and 8.8% year-on-year. This is now partially being offset by an easing of inflation for food consumed at home, which had been a major inflation factor. The silver lining in the above is that the month-on-month inflation pace for services less energy and for shelter are the lowest in several months, suggesting some easing of upward pressures in those sectors. That’s a positive. But inflation pressures are growing for transportation and food serviced away from home. What happens when demand for energy returns?

Soymeal inclusion in feed rations dropped to 14.5% in China at the end of 2022, down 0.8 points from 2021, and down 3.3 points from 2018. The reduction is part of China’s aggressive plan to reduce its reliance on soybean imports – particularly imports from the United States. China consumed 454 million metric tons of feed in 2022, as reported by China Direct, published by our Shanghai office, up 0.9% year-on-year. However, soymeal demand fell 4.6% to 65.8 mmt, reducing demand for soybeans by 4.1 mmt. China’s goal is to reduce soymeal inclusion below 13.5% by 2025, reducing annual consumption of soymeal by another 2 to 3 mmt per year, or cutting crush by more than 6 mmt from current levels. Some leading feed manufacturers are already below a 10% inclusion rate by adding amino acids to their mixes to replace soymeal. If there’s a positive in all of this, it is that it may increase demand for barley and grain sorghum in China.

Corn and wheat prices firmed overnight as the focus shifted back again to troubles for the Ukraine grain initiative. No ships moved through the grain corridor on Tuesday due to a dispute over inspection procedures. Ships are again moving today, but the Kremlin is again making statements suggesting that the future of the grain initiative is in peril. Furthermore, European countries that had been accepting grain from Ukraine via land transport are taking steps to block the movement of that grain due to the negative impact it is having on local prices for their farmers. Everyone was willing to look the other way in the first year of the war, but the lingering effects of the war are wearing on farmers in these neighboring countries, and they’ve had enough. Poland will not allow any Ukrainian grain to pass across its border over the next two to three months, while similar measures are being considered in Romania, Hungary, and Slovakia. The European Union offered assistance to farmers in these countries to ease concerns while maintaining support for Ukraine, but the entirety of the above has grain traders pondering the possibility of reduced grain flow out of Ukraine in the future that might further tighten global supplies.

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

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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Morning Grain Comments 8-7

Morning Grain Market Comments - Matt Zeller

Matt ZellerFri, 07 Aug 2026, 11:56

Grains & Oilseeds

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