Perspective: Morning Commentary for January 23

By: Arlan Suderman, Chief Commodities Economist

Mon, 23 Jan 2023, 14:36

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 23 – Stock futures pointed cautiously higher overnight, following through on Friday’s big bounce in stocks, as earnings season gains momentum on Wall Street. China’s post-Covid recovery also provides hope for boosting the global economy, although the nation is on holiday this week, providing few fresh headlines for traders. Recession fears remain, but much of that has already been priced into the market. However, gains are somewhat limited as rhetoric heats up in the Ukraine war amid threats that it could escalate beyond what anyone would like to see. Even so, the VIX continues to trade near 20 this morning, indicating that fear levels remain relatively low on Wall Street. The dollar index is trading near 102.2 this morning. Yields on 10-year Treasuries are trading near 3.53%, while yields on 2-year Treasuries are trading near 4.21%. Crude oil prices are nearly 1% higher in early trade, while the grain and oilseed markets were mostly lower.

Eight in 10 people in China have already been infected with Covid, according to health authorities there. That means that 1.2 billion people have been infected, with some pandemic experts estimating that more than 1 million may have died in China from the virus. That’s far more than the official reported death toll of 72,000 deaths. China is virtually shut down from a business standpoint this week as it celebrates the Lunar New Year holiday, but its residents are actively traveling throughout the country to visit friends and relatives. That should take Covid to any areas fortunate enough to avoid the virus to this point. As bad as the death toll is, the market assumes that it will not put much of a dent in the economic recovery already developing in China following the outbreak. The people of China have essentially been shutdown from normal economic activity for three years. They’ve been saving money. They’re anxious to get out and to experience life again. They’re spending money. That’s expected to result in a notable rise in gross domestic product as we proceed through the remainder of the first quarter, and the remainder of the year. China has been a drag on the global economy the past three years, and its recovery is expected to soften some of the remaining economic challenges facing the remainder of the world as we move through the year.

Former Russian President Dmitry Medvedev stated late last week that Russia could resort to the use of nuclear weapons if it faces defeat in Ukraine. He went on to state that, “Nuclear powers do not lose major conflicts on which their fate depends.” Medvedev currently serves as deputy chairman of Russia’s security council, so he continues to hold a position of influence. Granted, he made the statements just ahead of a joint meeting of western leaders to discuss additional military aid for Ukraine. It’s not the first time that Russia has made the “nuclear threat” trying to make western leaders wary of increasing their involvement in the conflict. But it’s also important to recognize the ability of the human mind to self-deceive. Russia is convinced that it is the victim, and that history testifies to such. Russia has been invaded 50 times throughout history. It believes that it can best defend itself when the old Soviet Union boundaries are re-established that take its border back to the European mountains. It believes that the West’s defense of Ukraine is a guise to establish a foothold for attacking Russia. It believes that it is only doing what it needs to do to survive. I still do not see high odds of nuclear weapons being used in Ukraine, but it is a risk that we need to keep on our radar, as it could have significant long-lasting implications for grain production in that part of the world – a potential black swan event.

Ukraine exported 3.1 million metric tons of corn in December, up 21% month-on-month, with 27% of it (839.4 kmt) going to China. As such, current year Ukraine corn exports are expected to reach 23 mmt, down just 4 mmt from the previous year due to corn being a priority for export shipment since the war started. Russia continues to slow-walk inspections of ships passing through Bosphorus, limiting overall export volume. The average number of inspections dropped to just 2.5 vessels per day this month, backing up more than 120 ships, while dramatically reducing export volume. As such, the U.S. Coordination Council approved a plan to give priority to larger ships to increase export volumes. Shippers also report that they are still finding companies willing to provide them with needed insurance to haul grain, albeit at a higher price.

Weekend rains were a bit better than expected in Argentina, with more coming this week. That left the soybean complex vulnerable overnight, with corn and wheat prices giving way to selling as well. The grain and oilseed sector continues to struggle to sustain rallies in recent days, as they lack a strong near-term story, especially with China on holiday this week. As such, that leaves the Algos trading chart and momentum signals this week. Brazil soybean harvest progress thus far is only at about 2%, but it should gain significant momentum over the next couple of weeks. Brazil is expected to harvest a crop north of 153 mmt in the weeks ahead, up 26 mmt from the previous year. Nearly three-fourths of that crop is still unsold by the farmer. That means the Brazilian farmer still has to sell more than 4 billion bushels of soybeans in the weeks and months ahead.

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Perspective: Morning Commentary for August 12

August 12 – Today’s focus is on inflation, with the July consumer price index data out this morning. We have this, and one more month of data, ahead of the next Federal Reserve meeting. Of course, headlines from the Middle East and the Black Sea wars also have an ongoing influence on the markets. Stock futures posted gains this morning, while the VIX traded just below 15. The dollar index traded near 99.7. Yields on 10-year Treasuries are trading near 4.66%, while yields on 2-year Treasuries are trading near 4.18%. WTI crude oil is trading near $83, while Brent trades near $88 per barrel. The grain and oilseed markets rebounded from yesterday’s losses ahead of today’s highly anticipated WASDE crop report that is due out at Noon Eastern Time.

Arlan SudermanWed, 12 Aug 2026, 13:33

Grains & Oilseeds
Energy
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Renewable Fuels
Cocoa
Coffee
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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

Grains & Oilseeds
Energy
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Renewable Fuels
Cocoa
Coffee
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Forest Products

Perspective: Mid-Day Commentary for August 10

August 10 - Stocks traded quietly mixed to weaker through much of the morning as investors weigh Middle East war / peace headlines with artificial intelligence concerns / opportunities. Ironically, the VIX is trading near 15, putting it just barely above 2026 lows, despite the high level of geopolitical risks and AI concerns. The dollar index continues to consolidate largely between 99.5 and 100.0 after the late July break in what appeared to be Japanese central bank currency intervention. Yields on 10-year Treasuries are trading near 4.70%, while yields on 2-year Treasuries are trading near 4.24%. WTI crude oil is trading near $81 at this hour, while Brent trades near $87 per barrel on the geopolitical risks. The grain and oilseed markets are mixed ahead of Wednesday's big USDA WASDE crop report.

Arlan SudermanMon, 10 Aug 2026, 17:02

Grains & Oilseeds

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