Perspective: Morning Commentary for June 10

By: Arlan Suderman, Chief Commodities Economist

Fri, 10 Jun 2022, 13:21

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

June 10 – Stocks were cautiously lower overnight ahead of this morning’s updated inflation data, and ahead of next week’s highly anticipated Federal Reserve meeting, with that data escalating economic concerns. The VIX elevated to a 10-day high this morning to trade near 28, while the dollar is trading near 104.0. Yields on 10-year Treasuries are trading near 3.06%. Crude oil prices are mixed, while the Ags were also mixed overnight ahead of today’s monthly USDA WASDE crop report that could provide fresh fundamental direction for prices.

The consumer price index rose 1.0% month-on-month in May, up from 0.3% in April, and up from analyst expectations that it would rise to 0.7%. The headline CPI rose a 40-year high 8.6% year-on-year in May, up from 8.3% in April and beating analyst expectations of a slight decline to 8.2%. The core CPI that excludes the more volatile food and energy sectors rose 0.6% month-on-month in May, matching the previous month’s pace, and exceeding analyst expectations that it would slip to 0.5% growth. The core CPI for May rose 6.0% year-on-year in May, down from 6.2% in April, but above analyst expectations that it would decline to 5.9%.

Breaking down the numbers, food costs rose 1.2% month-on-month in May, and they were up 10.1% year-on-year. Food purchased for eating at home rose 1.4% month-on-month and 11.9% year-on-year. Food consumed away from home rose 0.7% month-on-month and 7.4% year-on-year. Energy costs rose 3.9% month-on-month and 34.6% year-on-year. Gasoline prices were up 4.1% month-on-month and 48.7% year-on-year. Fuel oil prices were up 16.9% month-on-month and 106.7% year-on-year in May. New and used cars, apparel, medical care, shelter, and transportation costs all saw notable month-on-month and year-on-year increases. No sector was spared.

Inflation is still hot, and in some cases, still gaining momentum. Inflation was already heating up a year ago, which makes sustaining the same year-on-year percentage more difficult. As such, policymakers were expecting the data to show more moderation in the year-on-year numbers. May’s hot month-on-month numbers also don’t bode well for seeing inflation cool any time soon. The Federal Reserve focuses more on the Personal Consumption Expenditure data, which is probably a more accurate measurement of inflation. But it too shows significant strength in inflation. Policymakers try to focus on the core data that excludes food and energy cost increases, but a) those increases are pushing everything else higher, and b) most other categories are also experiencing inflationary pressures of their own, even without food and energy influence. Today’s numbers are a concern to Wall Street, and that makes them a concern to Federal Reserve members, who will be meeting next week. Does that mean that the Fed will shift even more hawkish? That is also another concern of Wall Street. Traders like the stimulus in the system that feeds the markets. They don’t want to see the candy jar removed, but that is essential. Stagflation is a very real risk currently.

Today’s China Direct, published by our Shanghai office, reports of another round of mass testing scheduled for 14 of Shanghai’s 16 districts this weekend. That spurred mass panic throughout the city as consumers rushed to retailers to stock up on the necessities, amid memories of the most recent two-month lockdown still fresh in mind. New infections in China’s two largest cities of Beijing and Shanghai remain low at roughly 10 per day, but authorities are worried about cluster infections in both cities. For example, a beauty salon in downtown Shanghai had a case that led to more than 500 close contacts scattering throughout the city. Beijing shut down entertainment venues in two of the city’s largest districts after tracing cases to a few bars there. People fear a return to lockdown policies that again confine them to home. But they also fear encountering someone who tests positive a day or two later that then results in them needing to report to a quarantine center. This fear results in reduced travel outside the home, reducing consumer activity at restaurants and other businesses, hurting the economy. Other data showed that China’s CPI rose 2.1% year-on-year in May, while its Producer Price Index was up 6.4%.

Today’s anticipated USDA WASDE crop report will momentarily take the focus off a changing Midwest weather forecast, but that will likely become the focus again very quickly if we continue on the current path. Fundamentally, traders will put an increasing focus on the June 30^th USDA acreage and stocks reports, but weather will continue to be the big determinant of potential future price action. The domestic and global balance sheets are relatively tight, and a short crop created by adverse weather would necessitate more rationing of demand. The forecast models continue to trend hotter and drier than normal through late June into mid-July for the primary Ag Belt.

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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Perspective: Mid-Day Commentary for August 7

August 7 – Stocks are looking to end a strong week on a strong note, with the major indexes all in the green at the time of writing. The VIX touched a nearly seven-month low earlier in the session and remains muted as it hovers just below the 15-mark as this morning’s ugly labor market data helps ease hawkish Fed jitters. The dollar has rebounded from its nearly two-month low earlier in the session but remains in the red on the day, trading at 99.55 at the time of writing. Treasuries have had a very volatile day, with yields tanking following this morning’s Non-Farm Payrolls release but bouncing back into midday, with 30-year yields now trading at 5.209%, 10-year yields trading at 4.654%, and 2-year yields trading at 4.204%. Crude oil has risen from the morning lows as traders eye the weekend market closure for potential geopolitical developments, with nearby WTI now down only 0.2% on the day to trade around $78.10 and nearby Brent breaking into the green, up 1.25% on the day to trade above $83.50. The ags are largely mixed, with the grains and oilseeds mostly in the green, save for a mixed picture in the soy complex, while live and feeder cattle futures move in opposite directions, with the former adding to yesterday’s sharp losses and the latter attempting a rebound.

Mike CastleFri, 07 Aug 2026, 17:09

Grains & Oilseeds

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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