Perspective: Morning Commentary for May 20

By: Arlan Suderman, Chief Commodities Economist

Fri, 20 May 2022, 13:00

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 20 – Stock futures posted solid gains overnight, as traders seek value buys after the past couple of days of active liquidation. The VIX is trading near 29 this morning, reflecting elevated fear levels, but down from where they’ve been in recent days. The dollar index is also bouncing after a big sell-off yesterday, with the greenback trading near 102.9 this morning. Yields on 10-year Treasuries are also bouncing, as they trade near 2.83%, up from 2.77% at one point yesterday. Crude oil prices are mixed, while the Ags are mixed to weaker.

Confidence in the economy is very weak right now – both on Wall Street and on Main Street. Confidence is also very low in policymakers knowing what to do to fix the problem. That’s one of the reasons why we’ve seen such a sell-off on Wall Street in recent days and weeks, and why consumer spending has also taken such a dip. Currency in circulation remains at record high levels at $2.3 trillion, up from $1.8 trillion at the start of the pandemic. M2 money supply also remains at record high levels at $21.8 trillion, up from $15.5 trillion ahead of the pandemic. The economy is still flush with cash. The candy jar is still full of candy.

Consumers still have money. However, the consumer is becoming more discerning in how he/she spends the money. The consumer is pulling back on many discretionary items, while still actively spending on buying large ticket items such as homes and cars. They’re actively remodeling their homes as well. Homeowners have seen the value of their homes skyrocket the past couple of years, giving them much more equity to borrow against for renovating the home or for purchasing big ticket items, and they’re doing it at historically low interest rates. However, they’re also going down the value chain in other purchases to save money due to inflationary pressures and lost confidence. For example, they may buy hamburger to put on the grill instead of steaks. They may buy an off-brand product at retail outlets, instead of name-brand. The spending power is still there, but the consumer is redirecting it at this time of shaken confidence, and that has an impact on the economy. It also means that spending power can come back if confidence returns, which is why the Fed needs to find a way to remove stimulus without pushing the economy over the edge. That’s a challenge.

Covid numbers continue to come down in China’s lockdown areas, leading to some reopening of its economy. Shanghai continues to work toward full reopening over the coming month. People will need negative Covid tests within 48 hours prior to getting on a bus or subway or entering public venues. Those business that re-open will need to operate under a strict “closed-loop management” system until the end of May. That typically means that employees live at work with no coming and going. The delivery services that residents depend heavily upon for their essentials are back up to 20% of normal capacity currently, with hopes that they can be at 70% by mid-June. Meanwhile, Beijing continues to tighten restrictions, while trying not to lockdown the entire city, as happened in Shanghai. Yet, Beijing is moving closer to a total lockdown.

Ukraine’s Ministry of Agrarian Policy reports that spring crop planting is at 70% of year ago levels, which is better than expected earlier in the war. Spring wheat planting is near complete at 188.6K hectares, which is 91.5% of last year’s total. Spring barley area totals 927.5K hectares, which is 98.2% of 2021 levels. However, corn area planted is at 4.17 million hectares, which is 76.2% of year ago final area planted. Planting is occurring to varying degrees in all oblasts except Luhansk, where full-scale military activity is currently occurring. There remains considerable question about the yield potential of these crops amid limited supplies of fertilizer and chemicals, but the primary problem continues to be the inability to export what Ukraine produces. In fact, Ukrainian authorities say that the war is hurting its ability to produce and export three crops – last year’s crop exports, current year production and exports, and next year’s as well.

It’s cold and wet in the Northern Plains this morning. The next 10 days look much drier for the region, but it will be very cold the next several days, limiting drying potential. We should see some fieldwork however over the next 10 days in previously wet areas of North Dakota and Minnesota outside the portions of the Red River Valley that are still under water. Producers will put a priority on trying to get spring wheat planted, even if it is late, albeit with a yield drag. That won’t necessarily be the case with corn. There are still many moving parts, but I’m still working with an assumption that we could see 1 to 2 million, maybe more, unplanted corn acres in the region. On a positive note, the National Weather Service moderated its summer outlook yesterday by pulling extreme heat and dryness west to the western Plains, which is much better than its summer outlook last month. Other forecasters continue to keep significant risks of heat and drought in their outlook, so that’s something that still must be respected going forward. In other news, the Wheat Quality Council pegged Kansas wheat production at 261 million bushels, down from USDA’s 271 million bushel estimate two weeks ago. Small crops get smaller. Now it comes down to the scope of abandoned acres.

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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

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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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