Perspective: Morning Commentary for December 8

By: Arlan Suderman, Chief Commodities Economist

Wed, 08 Dec 2021, 14:16

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

December 8 – Stocks are poised to add to this week’s gains as Omicron fears continue to ease on Wall Street. The VIX slipped to a two-week low near 21 this morning, while the dollar index continues to consolidate near 96.1. Yields on 10-year Treasuries are trading near 1.50% in early trade today. Crude oil prices are modestly higher again this morning on the renewed Wall Street optimism about the economy as Omicron fears ease. However, the Ags were again mostly lower overnight on lower biofuel blending mandates and the upcoming WASDE crop report.

Washington averted another potential crisis, but it took some slight of the hand to do it. Last week’s focus was on keeping the government open with another continuing resolution, which has become the pattern for funding essential services, along with much of the rest of what government does. This week’s focus shifted to the debt ceiling. U.S. Treasury Secretary Janet Yellen warned that the United States would run out of money to meet its obligations by Wednesday of next week if the ceiling were not raised, while other estimates put the timeline later in December, or early in January. Regardless, Congress needed to act, and that’s been a problem of late.

The difficulty is in the Senate, where the rules require a 60-vote majority to end debate on a bill so that a vote can occur. Sometimes it is a good thing to slow down government action, as less legislation is sometimes better. Regardless, both parties see raising the debt ceiling as a toxic issue for voters in the current environment, but neither has done anything to fix the spending problem, so we need to continue to deal with the debt ceiling – think of it as the credit limit on your credit card. Congress simply keeps raising the credit limit, so to speak.

Democrats have the edge in the Senate, with Vice-President Harris providing the tie-breaking vote, but that means they would need Republican votes to get the bill to raise the debt ceiling to the floor for a vote. Republicans do not want to be associated with the bill, so that they can leverage it in next year’s mid-term elections. Doing nothing could result in defaulting on debt, which is deemed unacceptable. So, the two parties reached a compromise on Tuesday. An agreement was reached to pass a law allowing for a one-time raising of the debt ceiling to an amount specified by Congress – likely just over $30 trillion – that would just need a simple majority of both the House of Representatives and the Senate to pass. This short-term law would still need 60 votes in the Senate, requiring 10 Republicans to agree to it, but that is not expected to be a problem. As such, Congress can then pass the debt ceiling increase without a single Republican vote. This kicks the can down the road a bit further, likely requiring Congress to revisit the issue next spring or early summer, in a mid-term election year. It also allows Congress to go home for the Christmas break, where they will face their constituents.

The U.S. Environmental Protection Agency finally released its biofuel blending mandates yesterday afternoon for 2020, 2021 & 2022, although the 2020 numbers were a revision of previously released mandates. In the end, the revisions turned out to be one of the worst kept secrets in Washington, coming out pretty much as we expected. Total renewable fuel blending for 2020 was put at 17.13 billion gallons, with 12.5 billion of that conventional renewable fuel – primarily ethanol – and 4.63 billion advanced biofuels. Total renewable fuel blending for 2021 is 18.52 billion gallons, with 13.32 billion being conventional renewable fuels and 5.2 billion being advanced biofuels. Total renewable fuel increases to 20.77 billion gallons for 2022, with 15 billion of that being conventional and 5.77 billion being advanced biofuels. In the end, ethanol margins took a hit by seeing RIN values drop from $2 per gallon in May to near 80 cents recently anticipating this change. The EPA then reduced the biodiesel blending requirement to put more into the conventional to ease the pain for ethanol producers. The next question then is, do these changes do anything to slow the development of the renewable diesel and sustainable aviation fuel industries? The answer to that question is, no, probably not. Those industries are still expected to have a bright future, although it will take some time for the infrastructure to be developed to realize their impact on the edible oil sector.

Upward momentum for the Ags stalled recently amid Omicron fears and approaching USDA WASDE crop report and yesterday’s EPA release of new biofuel blending guidelines. Soybeans also face pressure as a big Brazilian crop approaches harvest that may steal exports. Yet, quality milling wheat stocks remain tight, and high fertilizer prices remain a risk for 2022 corn production, as well as for global wheat yields and protein content. Corn should find some support from a fresh 72.6-million-bushel sale to Mexico, with 29.7 million of that for next year’s crop.

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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: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

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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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