Perspective: Morning Commentary for August 20

By: Arlan Suderman, Chief Commodities Economist

Wed, 20 Aug 2025, 13:29

August 20 – Stocks again had a weaker tone overnight, with the tech sector leading the weakness. Retail earnings reports have sent a mixed message about the economy, while the tech sector faces its own set of challenges regarding exports to China. The Federal Reserve is expected to release the minutes of its July policy meeting this afternoon, which could provide insight into whether there were more than the two dissenting voters who argued for rate cuts, or not. The VIX is trading near 16 this morning – still relatively low but slowly edging higher ahead of Friday’s highly anticipated speech by Federal Reserve Chair Jerome Powell from Jackson Hole, Wyoming. The dollar index is trading near 98.1 this morning. Yields on 10-year Treasuries are trading near 4.30%, while yields on 2-year Treasuries are trading near 3.75%. Crude oil prices are bouncing roughly 1% this morning, following their recent weakness, while the grain and oilseed complex was quietly mixed overnight.

Wall Street is fixated on the rate cut issue. It wants to see rate cuts from the Federal Reserve, and the more the merrier. It believes that Powell has enough justification in softening employment data to justify a rate cut at next month’s meeting, with one or two more rate cuts before the end of the year. But slowly rising inflation data keeps nagging doubts in place in whether Powell will make the move that President Trump has been pressuring him to do. He knows that he will not be able to stay in his seat as Chair of the Fed beyond May – Trump has made that clear. He doesn’t want to be seen as a political pawn that yields to political pressure. At the same time, he’s human, and he would like to ease the pressure before he loses the support of the other policymakers. Two of those policymakers voted against him in the July meeting – the first double-dissent at a Fed meeting since 1993 – one of which is a leading candidate to replace Powell. Wall Street traders hope that today’s Fed minutes will reveal that there are others about to flip their positions toward rate cuts as well. Policymakers in China will be watching this drama unfold as well. U.S. rate cuts would allow them to also move forward with stimulative rate cuts.

U.S. Treasury Secretary Scott Bessent told the media Tuesday that the White House is satisfied with the status quo with China. He also stated that the next round of trade talks with China will likely occur prior to November, but no dates have been set yet. The latest agreement to suspend high reciprocal and retaliatory tariffs between the two countries extends until November 10. That means that some type of an agreement is likely by then, but big agreements rarely happen much before a deadline as each use the deadline as leverage to get as much as they can out of the deal. While not publicly confirmed, industry sources indicate that the May 11 agreement to suspend tariffs included an agreement to allow rare earth minerals and magnets to flow from China to the U.S. auto industry for a six-month period in exchange for U.S. computer chips to flow to China. If true, that would suggest that rare earth minerals will be a priority for any agreement reached in November. Commodities could certainly be a part of such an agreement as well, but we don’t know that to be the case until they are. Meanwhile, China continues to largely source its commodity needs from elsewhere, other than pork purchases. The biggest impact has been on the U.S. soybean market, which sent nearly one out of five bushels of soybeans produced in 2024 to China. Thus far we have notice of zero bushels of the 2025 crop committed to China. Its window of opportunity for selling soybeans to China essentially closes in December, with buyers looking to cheaper new-crop Brazilian supplies beyond that point.

Unemployment among non-student young people aged 16 – 24 in China rose to 17.8% in July, up from 14.5% in in June. The unemployment rate among those aged 25 – 29 rose to 6.9% in July, up from 6.7% in June. This is a rising problem for China as it stands tall and strong against the Trump tariff war. Rising unemployment among its younger generation continues to contribute to a lower marriage rate. Marriage registrations fell 20% on the year in 2024. That then leads to a lower birth rate, since births outside of marriage are not allowed in China. This comes during China’s anti-involution campaign in which it is trying to reduce over production capacity in its manufacturing sector, which also tends to reduce workers. China’s state-run economy needs to create employment for these young workers to sustain its economy, so it is doing so thus far with massive infrastructure projects that increase government debt.

The Pro Farmer Midwest Crop Tour reported that the Nebraska tour routes saw an average corn yield of 179.5 bushels per acre, up from 173.2 the previous year, and above the three-year average of 166.3 bpa. Soybean pod counts totaled 1,348, up from 1,172 the previous year, and above the three-year average of 1,132 pods. Indiana’s average corn yield came in at 193.8 bpa, up from 187.5 bpa last year and above the three-year average of 182.1 bpa. Soybean pod counts averaged 1,377, down from 1,409 last year, but up from the three-year average of 1,295. Today’s tour will focus on Iowa, moving into southern Minnesota to wrap things up tomorrow. They should see their best crops of the tour today and tomorrow. The tour traditionally understates USDA final yields.

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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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Perspective: Mid-Day Commentary for August 3

August 3 – The Dow Jones is up over 500 points as of the time of this writing, right in the range of the record high close just under a month ago; the marketplace at least appreciates the rhetoric from Trump calling for negotiations, and WTI crude oil dropping by around $5/bbl. The S&P and NASDAQ are also up 1% or better on the session, while treasury yields suffer chop lower on the day, with the ten-year note down slightly at 4.69% at this time.

Mike CastleMon, 03 Aug 2026, 15:10

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