Perspective: Morning Commentary for February 7

By: Arlan Suderman, Chief Commodities Economist

Mon, 07 Feb 2022, 14:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 7 – Positive money flow that lifted both stocks and the commodities characterized Wall Street to start the week, with the exception of crude oil, which came under pressure on rumors that the Iranian nuclear talks are nearing the finish line with a possible lifting of sanctions against Iran. The VIX is trading near 24 this morning as Wall Street assesses risk factors for the week. The dollar index is trading near 95.5, as yields on 10-year Treasuries trade near 1.92%, which is just below Friday’s two-year highs. Crude oil prices are modestly lower, while the Ags traded notably higher this morning on lingering weather and geopolitical risks.

The Centers for Disease Control report that the seven-day moving average for positive Covid-19 tests fell to 313K on Friday. That would have been considered a huge number a few months ago, as it would have been well above the previous record just above 162K set in September. However, perspective changes when you’ve gone through the Omicron numbers of recent weeks. Friday’s seven-day moving average was down by nearly a half million positive tests per day from the peak set on January 15^th. People are going back to work, and the economy is showing signs of recovering from the challenges presented by Covid as the Omicron variant raced through the U.S. population in December and January.

China reported 45 new locally transmitted Covid cases to start the week, including 37 in a new outbreak in Baise city in the southwestern part of the country bordering Vietnam. As a result, this city of 3.6 million people entered lockdown mode, implementing “no entry and exit” measures throughout the region. Highways and airports are temporarily closed, and private vehicles are suspended for cross-regional traffic. Baise City adopted home isolation control measures for its citizens that close down virtually everything except supermarkets, farmers markets, hospitals, and pharmacies. It’s part of China’s zero-tolerance policy toward Covid-19 designed to quicky stamp out any flare-ups that occur in the country. The result is that its healthcare system is not overwhelmed, but its economy is struggling, necessitating stimulus measures from China’s central bank at a time when other major central banks are moving toward tightening.

The U.S. State Department continues to warn that a Russian invasion into Ukraine is imminent, and that Russian troops could enter Kiev within three days of the start of the invasion. Meanwhile, French President Macron says that a deal to avoid a full-scale war in Ukraine is within reach. We’ve reached the date when Russia’s military exercise within Belarus that was used as an excuse to gather troops and military equipment there is scheduled to end. Russia’s Military Day is February 23^rd. Nobody knows the intent of Russian President Putin, but many observers suggest that “if” he wants to invade Ukraine, it will likely be between now and February 23^rd. Putin’s ideal scenario would be if he would get considerable concessions from the West combined with installing a puppet regime in Kiev without ever firing a shot.

Forecast maps trended drier for Argentina over the weekend, providing more fodder for the bulls who are buying the corn and soybean markets, on top of the geopolitical risks that supported the corn and wheat markets. This makes the Ags very attractive to fund money rotating out of the equities. I do not know how aggressive USDA will be in lowering production estimates for Brazil, Paraguay, Uruguay, and Argentina in Wednesday’s WASDE report. But in the end, what matters is whether the combines verify yields that are above or below private production estimates coming out of these countries. Brazil’s crop is largely set. The combines just have not yet moved into southern dry production areas to confirm production estimates for this drought-stricken area. Paraguay, which exports much of its production to Argentina to be crushed may end up with less than half a crop. I’m reluctant to get too aggressive in cutting Argentina’s crop size, where it’s the equivalent of the end of July in the Midwest growing season currently in Argentina. In other words, there’s still a lot of time for the crop to recover if the weather cooperates. That’s the key question. Currently, we’re looking at risks that total South American soybean production may drop by 30 million metric tons or 1.1 billion bushels. Brazil export bids are above U.S. Gulf bids from May on currently, and U.S. April bids are competitive as Brazilian farmers refuse to sell. China is not waiting for USDA to confirm a small crop. It’s started hedging its bets by making large purchases under the “unknown destinations” classification, or at least that’s what’s being presumed. Unknown destinations purchased another 18.6 million bushels of U.S. soybeans over the weekend, with 9.1 million being old-crop, on top of 9.3 million bushels of old-crop purchased on Friday.

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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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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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