Perspective: Morning Commentary for March 7

By: Arlan Suderman, Chief Commodities Economist

Tue, 07 Mar 2023, 14:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

March 7 – Stock futures were mixed to weaker overnight as traders waited for this morning’s comments from Federal Reserve Chair Jerome Powell when he testifies before the Senate Banking Committee, while the commodities also had a weaker tone. The VIX is trading near 19 this morning, so fear isn’t driving the equities as much as apprehension as traders wait for Powell’s comments. The dollar index is trading near 104.6 in early trade. Yields on 10-year Treasuries are trading near 3.95% this morning, while yields on 2-year Treasuries are trading near 4.88%. Crude oil prices are modestly weaker this morning, with a similar trend in the grain and oilseed markets amid a lack of a bullish story.

China’s post-Covid recovery will have challenges, both at home and abroad. Domestically, demand is on the rise for many of the finer experiences that consumers have missed out on over the past three years. People are traveling more within the country, they’re going out to eat at restaurants and enjoying entertainment centers once again. But demand for property and durable goods is slower to rebound following three years of restrictions that reduced income for many. Yet, there are encouraging signs that China’s economy will see a healthy rebound this year, leading to a notable increase in stocking up with raw commodities for the production of goods and products. Soybean bookings in the first quarter of this year total 24 – 25 million metric tons, according to our industry survey, as reported in this morning’s China Direct that is published by our Shanghai office. That’s up eight to nine percent from the previous year. Chinese buyers bought another 20 cargoes or so of soybeans last week, primarily for April and May loading out of Brazil. Iron ore shipments were up 7.3%, with coal imports up 70.8%, and refined oil imports up 14.4%, although crude oil and Liquified Natural Gas imports were down 1.3% and 9.4% respectively. Buyers are basically stocking up on expectation of a significant rebound in demand, which they still expect to develop this year.

But China’s stock market is struggling to sustain the initial post-Covid rally due to an initial bumpy road in the recovery. Lower exports contribute to that bumpy recovery, as both Europe and the United States face their own economic challenges, and as some manufacturing comes back home as part of the current move toward deglobalization. Chinese exports contracted for the fifth month in a row in February, with shipments in the first two months of this year down 6.8% from the previous year. That’s not good news for China’s export-dependent economy. Exports to the European Union were down 12.2% year-on-year in the first two months of this year, while exports to the United States were down 21.8% from the previous year’s pace. However, China’s Belt and Road initiative that builds dependencies with developing economies paid dividends to support its economy, with exports to these countries up 15.2% year-on-year. It’s interesting to note that China’s foreign trade with Russia jumped 25.9% on the year, with exports up 19.8% and imports up 31.3%. World trading patterns are definitely shifting.

Online negotiations are occurring for extending the grain initiative that allows Ukraine to export products from three approved ports. No direct talks have yet taken place between Russia and Ukraine, but Turkey and the United Nations are apparently talking to all parties involved separately. The current agreement is good through March 18, with traders expecting another 120-day extension, although confidence in such is a bit lower this week than it has been. Russia doesn’t like the agreement, which gives Ukraine revenue for defending itself while frequently undercutting Russian prices. But Russia also doesn’t want to anger Turkey or China, which both benefit from Ukraine exporting agricultural products. Many farmers are starting to redirect their grain and oilseed products toward Ukraine’s western border to avoid the uncertainty of the situation at the ports, pressuring prices at the border as supply exceeds demand in the current environment. That’s creating some tension with farmers in neighboring countries, triggering a new policy in Poland that puts a seal on shipments passing through the country to make sure that the grain continues to move through to other markets.

Grain and oilseed prices continue to trend lower overall, despite expectations that USDA will cut global stocks of corn and soybeans in tomorrow’s monthly USDA WASDE crop report. Traders expect a very modest reduction in Brazil’s corn and soybean production estimates, contrary to our Brazil producer survey results, while anticipating a much more significant reduction in Argentine production estimates. The average trade guess puts Argentine soybean production at 36.65 mmt, down from 41.00 mmt the previous month, with corn output falling to 43.41 mmt, down from 47.00 mmt the previous month. Some private estimates are 5 – 6 mmt lower than these estimates.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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