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Perspective: Morning Commentary for August 28

By: Mike Castle, Market Intelligence - Fertilizer Analyst

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Guest Commentary by Mike Castle

Senior Commodities Economist

August 28 – New Fed Chair Kevin Warsh takes center stage today from the Fed’s annual Jackson Hole Symposium, due to provide his address in the next hour. The market will surely be parsing over his words with a fine-tooth comb, but it’s worth keeping in mind that his stated goal is for the Fed to provide less forward guidance and play a less prominent role, allowing the trade to “play the ball, not the referee.” With that said, my own expectation is to hear largely hawkish language as we did following the July Fed meeting as Warsh doubled down on the Fed’s stated commitment to its elusive 2.0% inflation mandate, which may drive volatility in rate expectations in the short-term, but keep in mind that expectations softened notably in the month that followed his hawkish comments. Not much has fundamentally changed since the Fed’s July meeting: inflation remains above target and the economy continues to expand, but a weak July payrolls report has introduced more concern around the labor side of the dual mandate. Yesterday’s jobless claims did give some renewed signs of resilience in the labor market to potentially aid in providing a permission signal to move rates higher, but I still expect the Fed to emphasize the need for patience. There is obviously plenty more impactful data on both inflation and the labor market sitting between now and the Fed’s September meeting, so much of the focus may also be attempting to discern longer-term changes to Fed strategy and positioning moving forward instead of just their immediate next step.

Stock futures are pointing to a relatively quiet open following yesterday’s solid gains, no surprise given the anticipation ahead of Warsh’s upcoming press conference. The mood appears relatively subdued for now at least, with the VIX remaining on the low-end of 2026’s range, hovering below the 14.5 level at the time of writing. The dollar is looking at another quietly higher start to the day, up 0.07% to trade at 99.20. Treasury yields are elevated to start the day, which may come into focus in Warsh’s comments this morning, with the most notable being 30-year yields moving back up to the psychological 5.20% level at the time of writing, while 10-year yields push to trade at 4.684%, and 2-year yields rise near 4.24%. Crude oil is in the red to start the day following potential signs of progress in the Middle East which we’ll outline in more depth below, with nearby WTI down 1.3% to trade at $82.45 and nearby Brent down 1.0% to trade at $87.60. The ags are mostly higher with the grains and oilseeds poised for another surge to kick off Friday trade amid ongoing escalations in the Black Sea and growing fears of what comes next.

Overnight strikes on both Russia and Ukraine produced significant damage, with Russia reportedly destroying a major thermal power plant in the Ukrainian port city of Kherson, raising the prospect of prolonged electricity and heating shortages ahead of winter. Ukrainian government officials are already urging some residents to leave the city in response, highlighting the extent of the damage. On the other side, Ukrainian drones struck a Russian refinery at Yaroslavl, nearly 1,000 KM from the frontlines, while also reportedly striking a Tu-95MS strategic bomber at the Engels-2 airbase. If confirmed, this would be a notable achievement for Ukraine given the finite number of these planes, used to launch cruise missiles at Ukrainian targets. Because of this, Russia could feel even more pressured, raising the risk of further escalation. The risk of war expanding outside of Russian and Ukrainian borders continues to linger following increasing Russian drone incursions into neighboring Moldova. This week has brought a much more significant uptick in Russian targeting of Ukrainian logistics connecting Ukraine with their western neighbors Moldova and Romania, clearly with an intention of attempting to cut off their ability to find alternative routes for grain shipments with the Black Sea effectively shut down. Border crossings, road bridges, and transport nodes have all come into the crosshairs, with perhaps the most strategically important being the Mayaky bridge in southwestern Ukraine, with the importance of this bridge growing exponentially post-invasion given the heavier shift to Danube ports. The big question for global markets continues to be the duration of the intensifying war on commodity movement in the region, with no signs of slowing in the near-term.

Today officially marks six months since the start of the Iran war, proving to be a significantly longer conflict than initial expectations. There continue to be renewed signs of progress in working toward a conclusion, or at minimum a renewal in talks to do so, after roughly two months of a costly strategic stalemate following the breakdown of the June “ceasefire.” Per Bloomberg, Iran’s Foreign Minister Abbas Araghchi today said resuming diplomacy with the U.S. “isn’t impossible” following talks with Qatari mediators yesterday. It’s worth noting he referred to these as “creative discussions,” interesting wording after discussing efforts to reach an interim framework to allow movement through the Strait of Hormuz. Following seemingly positive discussions between Oman and Iran regarding a proposal for joint navigation management of the Strait earlier this week, this appears to be another sign of momentum towards the beginning stages of normalizing commodity movement in a more substantial way.

I would still frame this as extremely cautious optimism, however, as we’ve seen this story play out countless times over these last six months. There’s still a sizable gap between the two sides’ demands, with the U.S. appearing committed to ramping up pressure economically rather than militarily, and President Trump this week saying he is “not in a hurry” to restart negotiations. Additionally, along with the more positive comments from Iranian Foreign Minister Abbas Araghchi today, he also stated that progress hinges on the U.S. understanding that “pressure doesn’t work.” Obviously, both sides will continue to talk tough publicly to maintain support with their own bases. Even so, this is a notable improvement in sentiment regarding the possibility of renewing peace talks, while also seeming to provide potential momentum to a short-term solution to resuming more meaningful shipments through the Strait of Hormuz.

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Perspective: Morning Commentary for August 28

August 28 – New Fed Chair Kevin Warsh takes center stage today from the Fed’s annual Jackson Hole Symposium, due to provide his address in the next hour. The market will surely be parsing over his words with a fine-tooth comb, but it’s worth keeping in mind that his stated goal is for the Fed to provide less forward guidance and play a less prominent role, allowing the trade to “play the ball, not the referee.” With that said, my own expectation is to hear largely hawkish language as we did following the July Fed meeting as Warsh doubled down on the Fed’s stated commitment to its elusive 2.0% inflation mandate, which may drive volatility in rate expectations in the short-term, but keep in mind that expectations softened notably in the month that followed his hawkish comments. Not much has fundamentally changed since the Fed’s July meeting: inflation remains above target and the economy continues to expand, but a weak July payrolls report has introduced more concern around the labor side of the dual mandate. Yesterday’s jobless claims did give some renewed signs of resilience in the labor market to potentially aid in providing a permission signal to move rates higher, but I still expect the Fed to emphasize the need for patience. There is obviously plenty more impactful data on both inflation and the labor market sitting between now and the Fed’s September meeting, so much of the focus may also be attempting to discern longer-term changes to Fed strategy and positioning moving forward instead of just their immediate next step.

Mike Castle
Mike Castle
  • Grains & Oilseeds
  • Energy
  • Dairy
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  • Cocoa
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Perspective: Morning Commentary for August 27

August 27 – The tech sector is breathing a collective sigh of relief, with the tech heavy Nasdaq poised for the biggest gains of the major indexes to start the day after impressive earnings results from Nvidia, Salesforce, and CrowdStrike after yesterday's close. This sigh of relief is also reflected in Wall Street’s fear index, with the VIX falling back below 15 for the first time this week. The dollar has slowly inched higher this week as it claws back portions of last week’s losses and is holding just above unchanged at the time of writing, trading just above the 99.16 level. Treasuries are quietly mixed to start the day, with 2-year yields down very slightly to trade at 4.222%, 10-year yields unchanged at 4.664%, and 30-year yields up slightly to trade at 5.188%. Crude oil is also just above unchanged to start the day, with nearby WTI up roughly 0.7% to trade near $82.50 while nearby Brent is up roughly 0.6% to trade near $87.50. The ags are largely mixed to start the day, with the wheat complex clinging to small gains while corn and soybeans are quietly lower.

Mike Castle
Mike Castle
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Perspective: Morning Commentary for August 26

August 26 – Stock futures are pointing to a mixed open to start the day, with a dearth of economic data to parse through this morning and various geopolitical developments catching attention. The VIX remains in a relatively tight range near the low-end of what we’ve seen for most of 2026, starting the day around the 15.7 level. The dollar is up 0.2% on the day, hovering just above 99.11 at the time of writing, maintaining a quiet week after last week’s sharp drop. Crude oil is looking to extend its slide this week amid a renewed potential movement toward normalization of flows through the Strait of Hormuz, with nearby WTI down 0.5% to trade near $80.70 and nearby Brent down 1.4% to trade near $86 at the time of writing. Treasury yields are looking at a quiet move higher to start the day, though the bigger rises are at the front-end of the curve, which should put the U.S. Department of Treasury in a good mood this morning. 2-year yields are up to 4.224%, 10-year yields are up to 4.66%, and 30-year yields are trading at 5.185%--off notably from their recent peak above 5.33%. The ags are mostly higher to start the day, with the wheat complex seeing double-digit gains following fresh strikes on vessels in the Black Sea from both sides, coinciding with Tunisia announcing a tender for 125,000 metric tons of optional origin milling wheat, warning that suppliers may not invoke force majeure due to the escalations in the Black Sea, which draws more focus to the impact this conflict may have on global wheat trade.

Mike Castle
Mike Castle
  • Grains & Oilseeds
  • Energy
  • Dairy
  • Renewable Fuels
  • Cocoa
  • Coffee
  • Cotton
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  • Meats & Livestock
  • Forest Products
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