Perspective: Morning Commentary for March 8

By: Arlan Suderman, Chief Commodities Economist

Wed, 08 Mar 2023, 14:33

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

March 8 – Wall Street zeroed in on the Federal Reserve again on Tuesday, with an expected similar focus today as well. Yet, the VIX continues to trade near 20, reflecting no notable panic on Wall Street. The dollar index is trading near 105.6 this morning, after setting a fresh three-month high near 105.9 earlier in the session. Yields on 10-year Treasuries are trading near 3.92% this morning, after another failed attempt at the 4% level, while yields on 2-year Treasuries are trading near 5.00%, having pushed above 5% for the first time since 2007. Much of the commodity sector faces headwinds from the strong dollar again this morning, combined with recession fears, with crude oil prices 1% lower and the grain and oilseed sector weaker through much of the night as well. Yet, grain and oilseed prices did firm early this morning as the U.S. desks opened ahead of today’s big crop report.

The private sector created 240K jobs in February, according to this morning’s report from Automated Data Processing, Inc. This morning’s number was double the January number of 119K, which was an upward revision from the 106K originally reported. It’s also well above the average analyst estimate of 200K. This raised concerns about the potential strength of Friday’s government report number to be released on Friday. The correlation isn’t very strong, but traders now worry that their estimate of 220K for Friday may be too low. A strong jobs report on Friday would provide more ammunition for the Federal Reserve to increase the size of its next rate hike, which Fed Chair Jerome Powell hinted was a possibility in his testimony before the Senate Banking Committee on Tuesday.

The next data point that will be the focus of Wall Street will be this morning’s JOLTS report, which will show the number of posted job openings at the end of January, so this is a bit of a lagging indicator. Yet, it has significance for the Federal Reserve in determining whether its monetary policy is having any impact on wage inflation. Job postings at the end of December totaled 11.012 million, which was just below a record high. The range of analyst estimates for this morning’s JOLTS report ranges from 10.3 million to 11.0 million. Taming wage inflation necessitates bringing the number of job openings into better balance with the number of people seeking work. Currently, that ratio is almost 2 to 1 – with twice as many job openings as there are people looking for work.

Retail car sales data suggests a rough ride for China’s post-Covid economic recovery, as detailed in this morning’s China Direct that is published by our Shanghai office. Passenger car sales were pegged at 1.364 million in February, up 6% from January when everything was shut down for a week or more for the Lunar New Year holiday. Combined January and February sales were off 20% year-on-year. This coincides with other data showing sluggish sales of durable goods in the recovery, which is in contrast to the rush to enjoy life following three years of Covid lockdowns and restrictions, with restaurant sales and entertainment centers doing relatively well. The people of China are anxious to get out and to enjoy life, but confidence in the economy is still not high enough, nor is income high enough, to make the big-ticket purchases.

USDA’s monthly WASDE crop report is due out at 11 a.m. Chicago time this morning. The March report isn’t known for too many surprises, but any adjustments in the domestic and/or global balance sheets could have significant implications. To be sure, this week’s movement in grain and oilseed prices has been more about money flow tied to Federal Reserve headlines on Wall Street than they have actual grain supply and demand fundamentals. That will likely remain the case in the days ahead as well if today’s USDA report fails to have any surprises to capture the trade’s attention. Fund managers, and the Algos that they use, tend to see supply and demand fundamentals differently depending on the overall view of what’s happening in the macroeconomic environment. For now, that focus is on expectations that the Fed will become more aggressive again in its monetary tightening. That tends to push the dollar higher, reducing demand for U.S. commodities.

The primary fundamental focus currently is on Argentina’s drought, where corn and soybean production estimates continue to tumble. The trade will assume that today’s anticipated reductions in the size of USDA’s estimates will already be outdated, with more significant reductions coming in the coming months. Ironically, this has largely been traded in the soymeal and soybean market, but it’s likely to impact the U.S. balance sheets more longer-term in the corn market. Total South American soybean production is still dynamically higher than last year and more than able to meet global demand with a currency advantage. That isn’t necessarily true for corn.

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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

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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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