Perspective: Morning Commentary for February 24

By: Arlan Suderman, Chief Commodities Economist

Fri, 24 Feb 2023, 14:21

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 24 – The focus is back on inflation today, with the release of the Federal Reserve’s preferred data that measures the rise in prices. Those inflation numbers again came in hotter than expected and notably higher than the previous month, raising fears of a more hawkish Federal Reserve when it meets again next month. The VIX is trading near 22 this morning, reflecting elevated fear levels as anxiety creeps back onto the trading floor. The dollar index traded to a new 7-week high near 105.1 in early trade. Yields on 10-year Treasuries traded near 3.94%, while yields on 2-year Treasuries traded near 4.77%, reflecting fresh three-month highs. Crude oil prices were modestly higher, while grain and oilseed prices were mostly lower overnight.

Today sadly marks the one-year anniversary of Russia invading Ukraine. Thousands of people have died on both sides – who knows what numbers to believe from either side. Many eastern cities are essentially leveled, while much critical water and energy infrastructure across the country has been severely damaged. Billions of dollars continue to flow into the war from both sides. The European Union is poised to accept Ukraine as a member, while the United States and NATO increase their commitment of human and military resources to defeat Russia. China cannot afford to have Russia lose, so it stepped up its involvement this week. We anticipate a peace plan to be proposed by China soon – perhaps even yet today. That peace plan will likely be a non-starter from Ukraine’s perspective, leading to continuation of the conflict, and leading to a more direct involvement of China. That will surely anger the United States. China released two key hit-pieces via its state media this week, seemingly focused on preparing its people for a more direct conflict with the United States. Ukraine has been poised for a possible significant escalation of Russia’s offensive today, but no such large escalation has yet been reported.

China believes that the dollar’s use as a global currency gave the United States an unfair edge in manipulating various world economies, allowing it to rise to superiority as an economy and as a military force, as stated in material published by its state media this week. One way then to overcome the United States is to get the yuan to be accepted as the world’s common currency. It took a step in that direction this week when Iraq’s central bank announced that it will accept the use of the yuan in its trade with China. Iraq is the third largest supplier of crude oil to China, and it is hoped that other Arab nations will soon follow Iraq’s lead. China has been working hard on Saudi Arabia and other suppliers to make the switch, according to outside observers. This follows steps taken in a meeting of the BRIC nations last June to set up an alternative to the SWIFT banking system that would be based on the yuan, and which would allow member nations to avoid the type of sanctions placed on Russia over the past year.

U.S. personal income rose 0.6% month-on-month in January, up from 0.3% in December, but below the 1.0% gains expected by analysts. Personal consumption expenditures rose 1.8% month-on-month in January, after contracting by 0.1% in December. Analysts had been expecting a 1.2% gain. So, consumer spending rebounded dramatically in January, as consumer sentiment began to improve. That helped fuel a stronger economy in January. However, consumer spending rose faster than income in January, and by a greater margin than what was anticipated by analysts, which tends to grow consumer debt.

The Federal Reserve prefers to measure inflation with the PCE price index data that was released this morning. The PCE price index rose 0.6% month-on-month in January, up from 0.2% the previous month, and exceeding analyst expectations of a 0.4% rise. The headline PCE price index rose 5.4% year-on-year in January, up from analyst expectations of 4.9%. Furthermore, the December number was revised to 5.3%, up from the 4.9% originally reported. The core PCE price index excludes the more volatile food and energy components, and it also rose 0.6% month-on-month in January, up from analyst expectations that it would remain unchanged at 0.4% growth. The core PCE price index was up 4.7% year-on-year in January, beating analyst estimates of 4.3%. Furthermore, the December number was revised to 4.6%, up from the 4.4% originally reported. So, inflation was hotter than expected in January, and it was in the core components, suggesting more stickiness to inflation than previously believed by the market. This further opens the door to the “possibility” that we could see a 50-basis point rate hike at the next meeting, or to at least the chance that we could see more 25-basis point rate hikes coming than what the market had been anticipating. Stock futures immediately fell, and the dollar index followed Treasury yields higher following the data’s release.

The Buenos Aires Grain Exchange pegs Argentina’s soybean crop at 33.5 million metric tons, with corn at 41 mmt. Both numbers likely have more downside risk, but the market yawned when the numbers were released, suggesting that they have already been priced in. Recession fears will likely create notable headwinds for the commodities today.

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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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