Perspective: Morning Commentary for April 13

By: Arlan Suderman, Chief Commodities Economist

Thu, 13 Apr 2023, 13:21

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

April 13 – Inflation and the Federal Reserve remain the primary focus as we head into another day on Wall Street, with traders generally upbeat about what they saw in this morning’s producer price index data, while remaining skeptical of the Fed following the release of its latest set of meeting minutes on Wednesday afternoon. The VIX is trading below 19 this morning, reflecting a net optimism on Wall Street following this morning’s data release, while the dollar index is trading lower near 101.0. That represents a fresh 10-week low for the dollar. Yields on 10-year Treasuries are trading lower near 3.38% at this hour, while yields on 2-year Treasuries are trading near 3.92%. Crude oil prices pulled back modestly from yesterday’s nearly five-month high as the lead contract approaches the 200-day moving average. Grain and oilseed prices were mixed in overnight trade.

The producer price index fell 0.5% month-on-month in March, after falling 0.1% in February. Analysts had expected the PPI to remain flat in March. The PPI was up just 2.7% year-on-year in March, down from 4.6% the previous month. Core PPI that excludes the more volatile food and energy sectors fell 0.1% month-on-month in March, after being flat in February. Analysts had been looking for an increase of 0.3%. Core PPI was up 3.4% year-on-year in March, down from 4.4% in February. These are very good numbers, or at least an impressive move in the right direction. The PPI is a measure of prices received by producers of goods and services. This suggests that they were able to contain price increases in March, and even cut prices in some cases, partially due to declining commodity prices and partially due to fears over consumer demand as the economy slows. Today’s data is a positive for future consumer inflation data, although other factors also go into the CPI.

First-time claims for unemployment benefits rose to 239K in the week ending April 8, up from 228K the previous week and above analyst expectations of 233K. This pushed the four-week moving average to 240K claims, up from 237.75K the previous week. Continuing claims for the week ending April 1 fell 13K to 1.810 million. These numbers are modestly higher from where they were a month ago, but much of that is due to the government changing how it calculates seasonal adjustments a couple of weeks ago. I would call these numbers neutral to friendly for Fed policy changes.

The Federal Reserve provided insight into the complex discussions taking place within the board room during its March policy meeting on Wednesday afternoon. The minutes made it clear that the discussions led to several policymakers changing their positions at the meeting. On the one hand, Fed members were worried about data showing sticky inflation that remained worrisome to them, with several entering the meeting considering a 50-basis-point rate hike. On the other hand, policymakers were concerned about the recent failure of Silicon Valley Bank and Signature Bank, and the resulting fallout for the banking industry. Several members considered a pause in rate hikes to provide time to see how tools implemented by the central bank would help to stabilize the sector. But in the end, policymakers decided that those tools appeared to have stabilized the banking industry enough to focus on tackling what they considered to be the greater threat – inflation.

Look at this in light of what many Fed members have also said in recent weeks – that they don’t want to make the same mistake that the central bank made in 1980. The Fed felt the pain of its interest rate hikes in early 1980, and it succumbed to pressure to ease that pain by pivoting its policy in March of that year, feeling like it had seen enough turn in inflation to justify the flip in policy. However, inflation took an even stronger foothold when it did so, with consumers rapidly jumping back in to take advantage of the lower rates to increase spending. That necessitated an even stronger push in rates upward toward 22% by late 1980 in order to finally get inflation under control. Policymakers are bent on erroring on keeping rates too high too long if necessary to be sure they don’t make that mistake. That tells me that another 25-basis point rate hike is likely in May. That will finally push the Fed rate above the headline inflation rate, although rising energy prices may push that headline rate higher again in the next 30 to 60 days. Nonetheless, I do not expect a cut in rates for some time as the Fed tries to make sure that inflation is tamed for good, or at least until the next cycle.

China is preparing for war against Taiwan, according to Taiwan’s foreign minister Joseph Wu. Whether that’s imminently true or not is difficult to tell. I certainly believe that China will take definitive steps at some point in the future to control Taiwan, and there are certainly signs that the date is much closer now than most thought a few months ago. But it’s difficult to discern how imminent it is. China would prefer the delay game, for time is likely on its side. However, recent developments suggest that China feels that it is being pushed toward action. Bull-spreading continues to be the feature for corn and soybeans, with nearby stocks tight and production prospects for new crop rising, even as global geopolitical risks rise. Falling wheat prices indicate that Black Sea worries are easing again for now, until the next headline comes across.

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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: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

Grains & Oilseeds

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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