Perspective: Morning Commentary for February 9

By: Arlan Suderman, Chief Commodities Economist

Wed, 09 Feb 2022, 14:31

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

February 9 – Stocks have a positive tone to them this morning, led by the tech sector, as the surge in Treasury yields pauses ahead of tomorrow’s highly-anticipated inflation data. The VIX is trading below 21 this morning as nerves ease on Wall Street, which is just above its lowest level since mid-January. The dollar index is trading near 95.5, while yields on 10-year Treasuries are trading near 1.93%, which is just below yesterday’s two-year high of 1.97%. Crude oil prices are consolidating either side of yesterday’s weaker close, while the Ags were mixed to higher ahead of today’s big USDA WASDE crop report.

Can we live with Covid? That’s the question before policymakers around the world, and it is being answered in many different ways, with significant implications for the respective economies, which also contribute to the global economy. People in England will no longer be legally required to self-isolate starting in late February if they have Covid-19 if Prime Minister Boris Johnson gets his way. That would make England the first major economy to replace legal requirements to self-isolate with guidance. Johnson is expected is expected to present his plan to Parliament when it returns on February 21^st. Britain also plans to drop its requirement for vaccinated travelers arriving in the country to be tested for Covid beyond Friday.

The wave of lifting restrictions is spreading across the United States as well. You can argue whether the reasons are related more to the science or to politics. The answer is probably found in both camps. The new variants have thus far trended in the normal way of virus mutations – toward being faster spreading, but less lethal. Doctors are also learning how to treat Covid patients better. But we’re also approaching the mid-term elections at a time when the party in power has low poll numbers, with many electors getting tired of Covid restrictions. The Biden camp warned of a dark winter and national lockdowns during the campaign, but the Administration is now painting itself as having a long-standing aversion to lockdowns. Many politicians are running from restriction policies as they see the spreading tide of voter fatigue with Covid restrictions. Politicians are doing what politicians do. Let’s put this into context with the current U.S. Covid numbers. The Centers for Disease Control’s seven-day moving average for positive Covid numbers fell to 247,319 on Monday, which is just below the old record high set in January of last year at 250,353. So, the numbers are pretty high, and these do not include the myriad of at-home tests not reported to the CDC. Yet, Monday’s number was down 69% from this year’s record high set on January 15^th above 800K. The fact that the symptoms overall are milder, and the general population has Covid fatigue, opens the door for changes in policies to allow us to “live with Covid.” Two years ago last week, I wrote about Covid coming from China, and I stated that fear would drive policies that restricted our economy, while reducing demand for commodities. Now that fear is being replaced with hope and determination, which is inherent in the American spirit.

China is on the opposite end of the spectrum, relative to Covid, as it maintains its zero-tolerance policy. China reported 73 new locally transmitted cases yesterday, with 72 of them in the new outbreak in Baise City, where residents are going through their third round of Covid testing. The city’s 4.3 million people are in virtual lockdown while getting tested as authorities work at stamping out the latest flare-up. Here’s an example of the adverse impact that has on the economy. Global aluminum prices are surging, partially due to the shutdown of a major production facility in Baise City due to the Covid restrictions. Normally, when idling the melting pots, you want to clean them out before cutting the power and cooling them. Instead, authorities cut the power first as Covid lockdowns were implemented, so the liquid and chemicals in the melting pots are now sticking to them, which must be scraped out by hand. As such, this facility is expected to be offline for most of this year before production can resume, further tightening global supplies. But at least they got the Covid, which is the priority above all else in China currently.

China bought another 8.8 million bushels of new-crop soybeans this morning, according to USDA. The question is, how much old crop will they need to buy to cover their needs? For that, they’re looking to today’s USDA WASDE report, as well as tomorrow’s CONAB report. Private production estimates in Brazil are as low as 125 mmt, whereas USDA dropped to 139 mmt in January. Neither USDA nor CONAB are expected to go all the way to 125 mmt in this report, but the scope of this month’s adjustment will communicate something about their perceptions of South American production problems. U.S. Gulf loaded soybeans are competitive with Brazil bids in March and April, and cheaper than Brazil starting in May as farmers in Brazil hold tight on the belief that supplies are not there. The stakes are very high longer-term, particularly if Brazil drops below 130 mmt, Paraguay falls to 4 mmt and Argentina falls to the low 40s or lower. Much of that story is yet to be written by the weatherman in Argentina, suggesting that we’re going to see volatility in the soybean market for some time yet before the focus shifts to South American corn production in March and April.

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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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