Perspective: Morning Commentary for August 6

By: Arlan Suderman, Chief Commodities Economist

Wed, 06 Aug 2025, 13:47

Today's Perspective Video: Trump’s Strategy Fuels Uncertainty: What It Means for Rates, Consumers & Corn Yields

August 6 – Stock futures found modest support overnight as Wall Street plants its hopes in expectations of a September Fed rate cut, while also finding strength in the latest round of earnings reports. The VIX dropped below 18 overnight, while the dollar index is trading slid lower to trade near 98.4. Yields on 10-year Treasuries are trading near 4.23%, while yields on 2-year Treasuries are trading near 3.73%. Crude oil prices are nearly 2% higher following several days of sharp losses, while the grain and oilseed sector is mixed to weaker again.

Elevated tariffs go into effect for roughly 15 countries still lacking a trade deal with the United States tomorrow, and yet the stock market continues to consolidate just below record high prices. Canada and Mexico are on that list of countries still lacking a trade deal with Trump, but they’re still both covered by the USMCA agreement reached during Trump 1.0. Mexico has another 90-day extension to the suspension of higher tariffs, but President Trump did not extend the same grace to Canada, presumably due to the contentious relationship that has developed between he and Canada’s leadership. Yet, 56% of Canada’s trade is covered by the USMCA or other exemptions – like the exemption for crude oil that it sells to the United States. The 50% tariffs on Brazil also include a list of exemptions, but strangely coffee and beef have thus far been left off of that exemption list. The 50% tariff rate on Brazil feels more political than trade related. We’ve heard for several months that we were close to getting a deal with India, but a deal with the world’s fourth largest economy now appears elusive due to President Trump’s insistence that it stop buying oil from Russia as the president tries to apply maximum pressure on Russia to end the war in Ukraine. Meanwhile, China and the United States remain far apart, able to agree to periodic extensions to tariff suspensions in exchange for allowing limited trade of rare earth minerals and computer chips.

The U.S. Treasury reports that tariff revenue for the fiscal year (beginning October 1) to date total $153 billion to this point, with anticipated revenues for the current fiscal year approaching $200 billion. The pace of that revenue growth started stepping up in May after the reciprocal tariffs first were implemented, with the pace increasing through the summer. The White House has toyed with the idea of giving U.S. consumers a tariff rebate check out of those revenues. Such a check would likely be stimulative to the economy, while also politically beneficial as well. Yet, the responsible thing to do would be to apply the revenue to the reduction of the national debt. The U.S. fiscal debt now stands at $37.2 trillion, with the annual cost of servicing that debt now at $1.04 trillion, exceeding the $918 billion that we spend on national defense and war efforts each year.

President Trump continues to apply pressure on the Federal Reserve to cut interest rates. Yes, every president would love to see the economy stimulated with lower interest rates while they’re in office. But he’s also interested in lowering that trillion-dollar interest expense to help balance the federal budget. The Treasury Department is doing what it can to lower the annual interest costs by rolling the debt into short-term certificates as existing ones expire. That decreases the supply of longer-term debt certificates, allowing yields on 10-year Treasuries to come down. The Trump Administration hopes that will help to stimulate the housing sector, while also reducing the fiscal cost of servicing our debt. The president also stated yesterday that he is very close to naming his nominee to replace Jerome Powell as Chair of the Federal Reserve, even though Powell’s term doesn’t expire until May. Trump may be trying to influence the Fed to lower rates if his nominee is an existing member of the Federal Open Market Committee who currently favors lower interest rates. That could lead other FOMC members to switch their loyalty to the next leader of the organization, leading them to also vote for lower rates. I do not agree with political influence of the Fed, but this may be the strategy.

Cash sources suggest that China bought a fourth cargo of soymeal from Argentina for fall delivery, which is clearly sending a message to the United States that it can find ways to fill its needs without U.S. soybeans. China currently has 735 million bushels of South American soybeans booked for the 2025-26 marketing year, with zero bushels of U.S. soybeans booked for the period. Of the above commitments, 456 million bushels of South American soybeans are committed for delivery in September through December, in addition to the cargoes of soymeal. China continues to receive massive shipment levels of soybeans from South America – primarily Brazil – that are flooding its ports, pressuring its crushing facilities to operate at greater capacity. Chinese crushers sold nearly 2 million metric tons of soybean meal for fourth quarter delivery on Tuesday – the largest one-day total thus far this year. China accepted shipments of 440 million bushels of soybeans in July, with August arrivals estimated to be 404 million bushels, followed by 367 million bushels in September, and another 330 million in October. China has so much of Brazil’s export capacity locked up that other countries are coming back to the United States to meet their needs.

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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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