Perspective: Morning Commentary for December 5

By: Arlan Suderman, Chief Commodities Economist

Mon, 05 Dec 2022, 14:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 5 – Stock futures had a negative tone overnight, as traders fret about next week’s Federal Reserve meeting following Friday’s strong jobs report. However, commodity prices traded mostly in the green overnight as China took additional steps to open up its economy. The VIX is trading near 20 this morning, after probing below 19 for the first time in eight months on Friday. The dollar index is trading near 104.5 this morning, after trading to its lowest level in five months earlier in the session. Yields on 10-year Treasuries are trading near 3.56%, while yields on 2-year Treasuries are trading near 4.32%, with the massive inverse reflecting Wall Street’s belief that the U.S. economy will go into a recession next year. Crude oil prices are trading nearly 3% higher on the weaker dollar and China optimism, while those factors provided a modest boost to grain and oilseed prices overnight as well.

The yuan surged in value versus the dollar overnight, while Chinese stocks jumped in value as well after authorities took more steps to open up the Chinese economy, while using rhetoric that downplayed the risks of Covid-19. Shanghai and 10 other cities will no longer require negative nucleic acid Covid test results before accessing public transportation and other public venues. This follows similar moves to open things up in Guangzhou last week. Authorities noted that there were no increases in requests for public health assistance after five days of the relaxed measures in Guangzhou, where health officials stated, “Covid-19 is now no more serious than a seasonal cold, and there is no need to panic.” That reflects a dynamic shift in rhetoric from authorities, suggesting that they are preparing the public for opening up the economy. Statistics in China show that more than 90% of the cases for the current variant are asymptomatic or very mild, with only four cases in Guangzhou severe or critical in the current outbreak, with no deaths in the city.

Corn prices are falling at Ukrainian ports due to a slowdown in ships coming in to be filled. Port facilities are filling with grain, with fewer ships coming into harbor. A big reason for the slowdown is Russia’s slow walking of ship inspections, which backs up ships, raising costs for shippers. That makes Ukrainian grain less attractive to buyers. Electrical blackouts also contributed to problems at Ukraine ports, after Russian air strikes put 90% of the country in the dark. However, exporters are finding ways around the power problems. Meanwhile, authorities are concerned that much of Ukraine’s winter crops went into the ground too late with inadequate fertilizer and other crop inputs, leaving them vulnerable to harsh cold now moving into the region. Overall grain production fell 40% in Ukraine this year, with significant additional losses expected in 2023, due to the war that has destroyed much of Ukraine’s economy and infrastructure needed to support grain production.

Good rains fell across virtually all of Brazil’s primary crop growing areas over the weekend, keeping crops in good condition across most all of the region. The earliest of the soybean fields should reach maturity for harvest in Brazil here over the next several weeks in Mato Grosso, although the later soybeans in southern areas won’t be ready for harvest for another six to eight weeks. The current weather pattern keeps Brazil’s soybean crop on track to produce 155.1 million metric tons, which is up nearly 28 mmt from last year’s crop. Meanwhile, extreme heat will intensify drought stress in Argentina, where less than a third of the soybean crop has been planted, and the overall outlook remains dry. I looked back at Argentine soybean history to find a “worst-case” scenario that we could consider. We saw similar area planted with severe yield reductions in 2008, producing a crop that is roughly 16 mmt smaller than USDA currently projects for the current year. Paraguay would also likely see a reduction in production of 1 – 2 mmt, but that still falls short of offsetting a 28 mmt increase in Brazilian production if we continue on the same track.

The backdrop for the commodity markets this week is a) Wall Street expects the Fed to remain aggressive in its monetary tightening stance next week, even if this rate hike is “just” 50 basis points, b) traders expect monetary policy to pull us into a recession that reduces demand for commodities, c) China is moving toward reopening its economy, which should improve demand for commodities after a period of time, and d) USDA will release its monthly WASDE crop report on Friday, although few changes of significance are expected. This will leave prices somewhat vulnerable to headlines, but they otherwise are expected to follow current chart signal direction in the absence of significant market-moving fundamental news. The holiday malaise continues. A weaker dollar and rising energy prices provide today’s support, and the grain and oilseed markets will likely continue to take a cue from those markets as long as fear levels remain relatively low on Wall Street – i.e., the VIX.

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Perspective: Morning Commentary for August 7

August 7 – The U.S. economy unexpectedly lost 23k jobs in July, dramatically below market expectations of an 80k increase and marking the worst Non-Farm Payrolls print since February. Furthermore, May and June were both revised sharply downward, with combined revisions showing 103k fewer jobs than previously reported. Outside of the healthcare sector, which added 22k jobs in July, the losses were very broad-based. Government payrolls saw the largest decline, shedding 53k jobs in July, the largest seen since October 2025, while June was revised down to show a loss of 10k jobs as well. The private sector at least saw growth, adding 30k jobs in July, now matching the month prior after it was revised down from the 49k initially reported, and substantially missing forecasts of 78k jobs being added. This is a sharp reversal in course from the largely better than expected U.S. labor data seen earlier this week.

Mike CastleFri, 07 Aug 2026, 13:26

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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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Morning Grain Comments 8-6

Morning Grain Market Comments - Matt Zeller

Matt ZellerThu, 06 Aug 2026, 11:56

Grains & Oilseeds

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