Perspective: Morning Commentary for August 31

By: Arlan Suderman, Chief Commodities Economist

Tue, 31 Aug 2021, 13:37

August 31 – Stock futures pulled back modestly overnight as Wall Street prepares to close out the month, although values remain very close to record territory as the economy continues to perform. The VIX again has a “16” handle this morning, after briefly probing below that level early this morning. The dollar index is trading at three-week lows near 92.5. Yields on 10-year Treasuries are trading near 1.29%. Crude oil prices are down nearly 1% in early trade, while the Ags erased overnight gains to trade mostly lower this morning.

The United States is officially out of Afghanistan, 20 years after arriving there to dismantle the terrorist network that led to 9-11. There’s been a lot of turnover on Wall Street since that dark day in American history 20 years ago, but there are many still present who have vivid memories of that day when America was tested. The emotions present then, are still very present today in those who experienced it first-hand, especially those who lost people close to them. Many of the factions responsible for 9-11 are still present in Afghanistan today. The headlines will soon return to how the economy fares, and to discussions about when the Fed will taper. But those who remember will also wonder, hoping that we do not have to face that test again.

The remnants of Hurricane Ida are moving through the Tennessee Valley this morning, bringing heavy rains to the region as the damage assessment begins in Louisiana and Mississippi. The initial report from the Ports of New Orleans was that damage was rather minimal, although some specific facilities sustained significant damage. Power remains a problem, as well as drinking water for employees trying to return to reopen the ports. It’s still unclear how long the ports will be closed, but attempts will be made to see some movement yet this week, while it will be much longer before those facilities suffering more significant damage will be able to function once again. The ports were down for 15 days following Katrina. They are not expected to be closed that long following Hurricane Ida, although individual facilities that suffered significant damage will likely be closed longer.

Colonial Pipeline remains closed due to Hurricane Ida. Colonial supplies nearly half the gasoline consumed on the East Coast. It reports that it will restart lines 1 and 2 on Monday night. Supply shortages aren’t making headlines yet, but roughly 9 Louisiana refineries were either fully or partially shutdown as of Monday, according to the Department of Energy. The listed total capacity of these nine refineries is 2.3 million barrels per day. That lost production is bound to create ripple effects through the gasoline supply line for weeks to come. This would also be expected to contribute to higher cash prices for gasoline, adding to the current inflation pressures facing our nation.

USDA reported late Monday that the U.S. corn crop rates 60% Good to Excellent this week, unchanged from the previous week. The soybean ratings were also unchanged from the previous week at 56% Good to Excellent. An upward adjustment in Illinois ratings was offset by declines in other scattered states. It’s interesting to note that substantial rains over previously dry areas of the northwestern Ag belt provided only minimal gains in ratings, as much of the damage was already irreversible.

The margin for error remains very small on this year’s corn and soybean balance sheets, as we close out the 2020-21 marketing year today. The focus is now on the 2021-22 marketing year that begins tomorrow for these crops. Yet, the debate over whether this year’s crops will be large enough to supply anticipated demand over the coming year has not been answered. It comes down to, how are the crops filling? What will be final seed size? That will vary considerably from one area to the next, depending on whether the late rains came in time. A 5% difference in seed size overall has a big impact on final production – one way or the other – with significant price implications.

USDA is currently sampling fields to determine that very thing. The September objective field sampling won’t tell us everything we need to know, but it will provide greater clarity. Surprises will be possible in either direction. USDA will release its updated production estimates on September 10^th, when those estimates will also be placed in its updated WASDE balance sheets. That is the current focus of the markets. The primary exception will be wheat. USDA generally waits to update its wheat production estimate until it completes and prints its small grains summary report on September 30^th, to be incorporated into the WASDE report October 12. Yet, the world will be watching on September 10^th to assess the corn and soybean implications – especially China.

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Perspective: Morning Commentary for August 6

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Mike CastleThu, 06 Aug 2026, 13:24

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Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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