Perspective: Morning Commentary for August 1

By: Arlan Suderman, Chief Commodities Economist

Mon, 01 Aug 2022, 13:35

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

August 1 – Stock futures pulled back a bit overnight from their recent run that saw values bounce notably from mid-June lows. Poor economic data from China raised concerns about this week’s U.S. economic data. Traders are also keeping an eye on House Speaker Nancy Pelosi’s trip to East Asia. Taiwan was not on her travel itinerary released over the weekend, although many observers still expect her to do at least a touch and go stop in Taiwan in the days ahead. That would be expected to trigger a response from China’s military, but not likely the kind that would escalate a military conflict with the United States. The VIX bounced to trade near 23 this morning, after falling to a fresh three-month low near 21 on Friday. The dollar index is trading near 105.4 this morning, after posting nearly four-week lows earlier in the session. Yields on 10-year Treasuries are trading near 2.63%, while yields on 2-year Treasuries are trading near 2.90%. Crude oil prices are 5% lower on China’s disappointing economic data, and ahead of this week’s OPEC+ meeting. The Ags are lower as well, participating in the broader commodity sell-off, as well as reacting to the first cargo of grain to leave a Ukraine port since the war started in February.

China’s official manufacturing purchasing managers index (PMI) fell to 49 for July, surprising market participants with a lower-than-expected reading that indicates contraction among that nation’s small and mid-sized firms. The July number was down from 50.1 in June, and below analyst expectations that it would show modest expansion at 50.4. Analysts expected that the July number would be better, since many areas of China were trending toward opening up more than they had been for several months as Covid numbers remained somewhat under control. Yet, the lingering flare-ups and the resulting restrictions negatively impacted consumer demand. The employment index component fell for the fourth consecutive month in July, while new order growth slowed as well. Meanwhile, housing prices continue to fall notably lower in China as well, raising concerns over the health of the property sector, that makes up a fifth of China’s economy. More details on China’s economic challenges can be found in China Direct, published by our Shanghai office each day.

The first load of Ukrainian corn left Odessa port this morning since the start of the war on February 24. Another 16 ships are said to be ready to leave shortly in a caravan if this first shipment goes well. The first load that left this morning is headed to the port of Tripoli in Lebanon carrying 26K metric tonnes of corn. Ukraine hopes that the recently signed agreement will allow it to increase income for its war-ravaged economy by at least $1 billion. That is something that has not been overlooked by Russia, and that is very much contrary to what Russia wants to see happen. Keep in mind that Russia still has the upper hand in the region. Many people will argue that. I would agree that progress has been much more challenging than Russia expected, but it is still the aggressor, and it still has the greater resources in the region. Don’t expect it to sit idly by while Ukraine garners $1 billion from trade through its ports that it can use to fund its defense efforts. This first shipment of corn is being blamed for this morning’s weakness in the grain and oilseed markets, and it certainly is a factor. But that’s also within a context of a selloff in the broader commodity sector as well, which may even be the greater factor.

Little has changed in the August weather outlook from what we expected when we left on Friday. Yes, there’s more rain in the outlook for the eastern Midwest as the forecasts progress forward, but that was expected. High pressure over the Central Plains is still the dominant feature. The models always tend to try to migrate that high to the west this time of year, and it may do so from time to time. The heat is expected to ebb and flow in the Plains – impacting Iowa at times. Rainfall is expected to remain below normal with high evapotranspiration rates west of the Mississippi River. Multiple reports of corn being chopped for silage are already being heard in Kansas and Nebraska. However, this is not considered to be a pattern that would result in a failure of the national crop, nor do I expect it to result in significant reductions for the August estimates.

StoneX expects to release its first monthly production estimates Tuesday afternoon, utilizing its proven customer survey process. That should be the first of many private production estimates to be released over the next 10 days ahead of USDA’s estimates to come out on August 12^th. Keep in mind that USDA resurveyed farmers in Minnesota and in the Dakotas last month about their planted acreage. I am looking for a reduction in national corn acreage of 450K in next week’s report as a result, with a very modest increase in soybean and spring wheat acreage. I’m still anticipating the possibility of an eventual 2% - 5% national yield reduction if the forecast verifies.

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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

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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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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