Perspective: Morning Commentary for May 10

By: Arlan Suderman, Chief Commodities Economist

Tue, 10 May 2022, 13:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 10 – Stocks rebounded overnight, as the markets consolidate a bit, following recent sharp losses, and ahead of key inflation data scheduled for release the next two days. Victory Day has come and gone in Russia, with the war still raging on in Ukraine. The VIX continues to trade near 33 this morning, reflecting lingering worries about the future of the U.S. and global economy as inflation remains high, the Fed begins to tighten, and Covid-related lockdowns continue to tie up supply chains in China. The dollar index traded near 103.7 this morning as it consolidates just below yesterday’s 19-year high. Yields on 10-year Treasuries fell to 2.97% this morning, as some money came back into Treasuries. Crude oil prices are modestly lower, while the Ags were mostly higher overnight on lingering planting delays in the Midwest. The high VIX and strong dollar combine to create headwinds for the broader commodity sector, but those individual assets with a strong story can still hold their ground on most days. Both sectors have their sharply lower days, but overall, breaks continue to be bought in the crude oil market, as well as in many of the food-based commodities.

The small business optimism index is compiled by the National Federation of Independent Businesses based on its survey questions focused on a) plans to increase employment, b) plans to make capital outlays, c) plans to increase inventories, d) expectations for the economy to improve, e) expectations for increased real sales, f) current inventories, g) current job openings, h) expected credit conditions, i) sentiment toward expansion, and j) earnings trends. The NFIB index remained unchanged at 93.2 in April, which was slightly above analyst expectations that it would decline to 92.9. Yet, the April number remained below its 48-year average of 98 for a fourth consecutive month. Those small business owners expecting better conditions over the next six months fell one point to a net negative 50% in April, which is a record low for the survey. Key survey revelations included 47% of the small business owners reported job openings that could not be filled, while 70% of business owners were rising average selling prices.

Victory Day is May 9 in Russia. Symbolism means a great deal in Russia, so it was widely expected that Russian President Putin wanted to declare some type of victory over Ukraine on that day. But he wasn’t able to do so. The day was widely observed with the normal parade of weapons and troops, along with a speech from Putin, but the normal flyovers were largely absent. Putin called on the people of Russia to stand beside him as he sought to cleanse Ukraine of the modern-day Nazi’s in Ukraine – doing his best effort at revisionist history. Meanwhile, back in Ukraine, Russian forces stepped up their attacks on key targets within Ukraine, including missile attacks on the key port city of Odessa, where a shopping mall was hit. Unlike the early days of the war, there are no signs of a cease-fire or a peace treaty at this point, increasing fears that this war will become one of attrition.

Ukrainian Minister of Agrarian Policy Mykola Solsky reports that Russia continues to steal grain from occupied territory, placing much of it on the global market. He stated that Russia has already sent between 400 and 500 thousand metric tons of Ukrainian grain to Russian occupied Crimea for export shipment. It’s his belief that almost all of the vessels currently carrying grain from the port at Sevastopol contain grain that was produced in and confiscated from Ukraine. Planting of the 2022 crops continues in Ukraine amid reports that 7 million hectares have already been planted to spring crops, although the focus is more on those crops requiring fewer resources. That total is down 25 to 30% from year ago levels. We continue to hear reports from the ground of shortages of fuel, fertilizer and crop chemical that could notably reduce yields this year, while export capacity is currently at roughly one-fifth of pre-war levels.

Chinese lockdowns and broad-based economic concerns weighed on crude oil prices yesterday, with follow-through selling apparent overnight as well. Corn and soybean prices saw sharp losses as well in recent days on expectations that significant planting progress would finally occur this week. However, the rains are starting to work their way back into the forecast. We still expect significant progress this week, but this week alone is not a wide enough window to get the job done, and little to no progress is expected in the northwestern 20% of the belt, which keeps spring wheat planters parked as well. U.S. corn and soybean planting progress is at roughly half the normal pace, but just 1% of North Dakota and 9% of Minnesota corn is planted, with more rains coming. Soybean planting is even slower. More significantly. Just 8% of North Dakota and 2% of Minnesota spring wheat is planted, down from 37% and 50% respectively for the five-year averages. To be clear, these delays typically would be of little concern to the market, but they matter far more this year due to relatively tight global supplies, which were further tightened by the Russian invasion of Ukraine that shut down its ports. Market bulls also point toward some forecast models that call for a hot dry summer across much of the Midwest. Those forecasts are based on expectations that current sea surface temperature anomalies in the Pacific Ocean will be sustained through the summer. We do not know if that will be the case. But that risk must be respected in a year when global supplies are tight, as they are this year, with inflation also feeding more money into these markets.

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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: Morning Commentary for August 6

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Mike CastleThu, 06 Aug 2026, 13:24

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Energy
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Cocoa
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Perspective: Mid-Day Commentary for August 5

August 5 – The Dow Jones is ripping higher for yet another session, up safely over 500 points at the time of this writing to carve out another record high; the S&P and NASDAQ are a bit less enthusiastic but the former is still making its own record high, while the latter is less than 500 points off its own top thanks to a strong ongoing week of trade. The dollar is churning lower this morning in an effort to re-test Monday’s 1 ½-month low, while the ten-year note has flipped higher in the mid-morning hours. The CME FedWatch tool interesting has market odds of a quarter-point rate hike next month coming closer to a 50-50 proposition as crude oil prices decline.

Mike CastleWed, 05 Aug 2026, 15:19

Grains & Oilseeds

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