Perspective: Morning Commentary for June 13

By: Arlan Suderman, Chief Commodities Economist

Mon, 13 Jun 2022, 13:13

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

June 13 – Heavy liquidation continued on Wall Street overnight, as traders shed risk exposure following last week’s inflation data release, and ahead of Wednesday’s Federal Reserve monetary policy statement release. More inflation data is scheduled to be released tomorrow morning from the producer level, which analysts expect to also show little in the way of moderation of rising prices. Retail sales data for May will also be released on Wednesday morning, which is expected to confirm that rising prices are boosting those numbers as well. The VIX surged to a one-month high above 33 this morning as fear escalates amid the selloff. The dollar index soared to a one-month high of 104.9, putting it very close to a test of 19-year highs. Yields on 10-year Treasuries also surged to new 11-year highs near 3.29% on expectations that the Fed will become more aggressive in its monetary tightening. One would expect the above to also create “risk-off” selling in the commodity sector, and that is true across much of the sector, including the Energies. However, corn and wheat prices traded in the green early this morning on renewed crop concerns due to adverse weather in North & South America, Europe, and of course the ongoing problems in Ukraine that threaten available supplies there.

What’s the Federal Reserve to do? It, together with the Federal government, overstimulated the economy – injected too much stimulus into the economy for too long. The Federal government hasn’t done much to rectify the situation, and the Fed waited too long to start unwinding its monetary easing program, allowing inflation to get out of hand. Now it finds itself between the proverbial “rock and a hard place” as it assesses its available options. Inflation at 40-year highs is killing the economy, necessitating that the Fed raise interest rates and withdraw stimulus – shrink the balance sheet. That’s the medicine that the economy needs, and Wall Street knows it. However, Wall Street also fears that the medicine could also damage the economy; perhaps doing significant harm. Doing nothing could result in a stagnated economy with lingering high inflation – stagflation. Consumers loved the extra stimulus money, and Wall Street loved it as well. Deep down, both know that it needs to end, but nobody likes it. Today, we’re seeing more of Wall Street’s temper tantrum over it. This could be a rough landing, with money flow chasing those assets that have the strongest fundamentals in the commodity sector. For now, that’s some of the food-based assets.

Today’s edition of China Direct, published by our Shanghai office, notes a significant uptick in Covid-19 infections following the development of a few clusters in Beijing and Shanghai as noted late last week. The number of daily cases doubled in Shanghai to 37 on Sunday, while a cluster infection originating in a bar in Beijing resulted in more than 200 new infections involving more than 6K people moving across the city from June 10 to 12. That cluster has possibilities of spilling over into other nearby cities as well, which could result in more lockdowns. For now, both Beijing and Shanghai are attempting to control the outbreaks with dynamic and accurate epidemic coping measures that would avoid shutting down all public venues, but their residents are quite fearful of another lockdown. President Xi Jinping reiterated last week that China would “unswervingly adhere to the general policy of ‘dynamic zero-Covid.”

Crude oil prices came under relatively modest selling pressure today on the above fears that China will again increase lockdowns that suppress demand for energy. That pulled WTI crude oil prices back below $120 per barrel this morning, although the longer-term uptrend remains intact for now on rising demand and limited supplies in much of the rest of the world. China’s wheat harvest in more than three-fourths complete, and it appears to be a bin-buster with relatively good quality, even after authorities said the crop had the worst ratings on record late-winter. This week’s record heat in the U.S. Plains should rapidly advance the harvest from the Southern up into the Central Plains, creating some seasonal movement in the cash market. Evapotranspiration rates are expected to reach 2.0” over the coming week over much of the Midwest, while reaching 3.0” in portions of the Plains where record triple-digit heat is expected. The combination of high pressure pushing the storm track far to the north, and heat building beneath the high, leaves much of the Ag belt vulnerable to flash drought conditions as the crops develop.

Friday’s USDA WASDE crop report was about as tame as they come, containing few surprises. That leaves the focus on the June 30 acreage report and the developing weather story in the Ag belt. The acreage numbers truly do matter in a year when supplies are tight, but weather could ultimately be the largest wild card. Heat is advantageous to the developing crops prior to pollination until/unless the crop runs out of moisture. Some areas can go a few weeks, while others will be seeing the stress show this week. The pivotal time though will be mid- to late July. Break the current developing pattern by mid-July, and we could still see good crops this year. Sustain the current developing pattern through July, and we could have a significant problem on our hands. This afternoon’s USDA weekly crop progress report should show good ratings for the corn crop. The market will trade expectations of where we go from here.

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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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