Perspective: Morning Commentary for January 26

By: Arlan Suderman, Chief Commodities Economist

Wed, 26 Jan 2022, 14:17

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

January 26 – It’s Day #3 of “risk-off” week as traders fret about increased geopolitical and central bank risk. However, the market seems to have priced in the perceived risks to this point, with stocks starting to find at least a temporary floor yesterday, while many of the commodities are consolidating recent moves as well. We’ll learn more about the Fed factor this afternoon, while the geopolitical risks continue to play out over time. Stock futures point higher for the start of trade today, although where we finish the day will likely hinge greatly on this afternoon’s story currently being written by the Federal Reserve. The VIX pulled back below 30 this morning to trade near 29, reflecting somewhat calmer waters for now on Wall Street. The dollar index is trading near 96.1, while yields on 10-year Treasuries are trading near 1.78%. Crude oil prices are more than 1% higher, after trading near $87 this morning, while the Ags are mixed to weaker as traders take profits as they wait for more developments in Ukraine.

The Federal Reserve completes its two days of meetings today, releasing its revised monetary policy statement at 2 p.m. ET, followed by a press conference with Fed Chair Jerome Powell 30 minutes later. This may be the most important press conference of Powell’s tenure to date. I anticipate that the debate behind closed doors has likely been lively, with members of the Federal Open Market Committee believed to be far apart in their belief on the proper path that the central bank should follow. It’s Powell’s job to bring consensus to the group, and to craft a cohesive statement for release that shows unity and conviction on the proper direction for future monetary policy regarding rate hikes and for shrinking the balance sheet. The Fed may choose not to address shrinking the balance sheet in today’s statement, but I anticipate that it is being discussed, and that Powell will also be asked about it during the press conference. There’s a lot we won’t know until the minutes are released in 3 weeks. Wall Street wants to be convinced by the Fed that it finally has things right, and that it now knows how to manage this nation’s inflation problem. Doing so could restore calm to Wall Street, while failing to do so could add to this week’s sell-off.

Wall Street is worried about economic risks, while the energy and grain traders are worried about trade disruptions that would tighten global supplies if Russia engages Ukraine in a military conflict that disrupts either crude oil or grain flows out of the Black Sea ports. Russia is expecting written commitments from the Biden Administration by the end of this week regarding its “security concerns.” It doesn’t want Ukraine to be a member of NATO, nor does it want NATO providing assistance to Ukraine. Russian President Putin may have gathered troops, tanks, and other military equipment on its border with Ukraine simply to get those concessions, or he may fully plan to invade Ukraine to unite it to his country. Combined, Russia and Ukraine account for 29% of world wheat trade, while Ukraine is also responsible for 16% of the world’s corn trade. There’s a significant amount of fertilizer trade that could be impacted as well. That’s a big deal with world supplies already snug. That trade of those commodities may never get disrupted, or the disruption may be short in duration, but that remains an unknown that traders would prefer would go away. As such, these markets remain volatile, riding on day-to-day headlines from the region.

The Biden Administration’s biggest upfront challenge is to nullify Putin’s attempts to create division within NATO. Germany is a significant leader in Europe, but it is also quite dependent on energy coming from Russia. Its economy can’t afford a hit as it tries to emerge from the pandemic, so it has been less than enthusiastic about supporting steps that would anger Putin. As such, the Biden Administration is doing what it can to assure Germany and other European members that alternative energy supplies are available so that they will support troop and equipment movement meant to create a deterrent to Putin’s aggression. That’s one of the reasons we’re seeing strength in the crude oil market currently.

Winter wheat prices had rallied roughly a dollar in 11 days, largely on the Russian / Ukraine conflict. Now the debate is whether that is enough or not? The answer to that question hinges on what happens going forward, but the recent sharp gains provided too great of temptation for some traders to take profits while they monitor the headlines. Corn supplies are vulnerable as well, if trade from the region is disrupted, but not to the scope of wheat. As such, corn price action is caught between trading the Russia / Ukraine conflict and South American weather, which for now is less threatening than it was a few weeks ago. Yet, despite the South American rains, both corn and soybean prices remain near their recent highs amid the longer-term weather risks, and the fact that all of these commodities are seeing their supply and demand managed within the context of high inflation expectations.

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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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