Perspective: Morning Commentary for May 22

By: Arlan Suderman, Chief Commodities Economist

Fri, 22 May 2026, 13:21

May 22 – Investors are looking at a three-day holiday weekend as they approach today’s markets, which will be closed for the Memorial Day holiday on Monday. That presents its own set of risks as headlines out of the Middle East continue through the weekend at a time when the markets will be closed. As such, we’ll see some position squaring today with an eye to that risk. That said, we enter into today’s trade with Dow futures reflecting expectations for a record high ahead of the weekend, with the S&P and the Nasdaq not far behind amid a flurry of positive economic data in recent weeks, along with strong earnings reports. The VIX is trading below 17 this morning, while the dollar index trades near 99.3. Yields on 10-year Treasuries are trading near 4.53%, while yields on 2-year Treasuries are trading near 4.06%. WTI crude oil is trading near $96 per barrel, while Brent trades near $103 per barrel. Wheat prices posted modest losses as Black Sea wheat prices itself into Western Hemisphere markets, while corn and soybean prices post modest gains ahead of the holiday weekend.

A peace agreement is near before it falls apart, only to be revived again in the next headline. Equity traders are developing headline fatigue, while those same headlines seem to still be driving Algo trading activity in the commodity sector – especially for the energy and food-based commodities. The latest headline is that the Pakastani Army Chief is on his way to Tehran with a worked-out peace treaty proposal, after he previously cancelled another planned trip just days ago as talks seemed to fall apart. Part of this is due to questions of leadership in Iran – we don’t know if the stated leader in Iran is even alive, leaving questions over who is calling the shots there. Part of this is due to the tremendous distrust between the two sides. But there’s also the strategy of Strategic Delay.

We don’t know who specifically is calling the shots in Iran, but it is clear that the Revolutionary Guard is running the country and running the war effort. The Revolutionary Guard is not up for election, and it controls the messaging both within and what flows out of Iran. On the other hand, democracy allows open expression by all sides. Leaders face regular election risks, along with criticism by their opponents throughout the election cycle. Ultimately, an elected leader is accountable to the people, whether the President of the United States, a member of Congress, or even a locally elected official. Our press is allowed to report the good, the bad, and all the criticisms expressed. That’s the ugly part of democracy that we fight to defend. Iranian leaders monitor that press and the opposition here in the United States, along with reported public sentiment regarding the current situation.

The Revolutionary Guard believes that it can out-last President Trump if it can delay things long enough. As such, they approach the negotiations with a strategy of giving the appearance of wanting to negotiate a deal, even allowing progress toward a deal from time to time to keep people thinking that they’re serious about it. Then they pull the rug out from under the negotiations at the last minute to keep the process going. That keeps pressure on President Trump not to attack Iran again, because that would “undermine the negotiations,” while strategically keeping the delay in place. The Revolutionary Guard’s goal is to delay things long enough to see President Trump’s power undermined so that he has to withdraw our military forces, allowing the Revolutionary Guard to survive. That allows it then to frame a message that it was able to stand up to the United States and “win,” supporting its global recruiting efforts. Even if it agrees to a peace agreement to buy more time, I do not expect it to live by the agreement, since its commitment to destroy Israel and the United States is at the level of a religious conviction.

It is my sense that this decades-long conflict is at a pivotal decision point. There are only two options facing the West at this point. We either go forward with the understanding that Iran will be a nuclear power, with all that implies, or we must be willing to pay the price of removing that option as a possibility. That would likely necessitate the use of ground troops. Iran understands the above as well. It is betting that the West does not have the intestinal fortitude to pay that price. And that is why it believes that its best strategy is one of Strategic Delay. And that means that we will not likely see the Strait of Hormuz open for free-flowing commerce any time soon, which will continue to build up longer-term deficits of energy and fertilizer.

The markets priced in the immediate fear of energy and fertilizer shortages, but the next phase is the realization that things “aren’t as bad as feared,” yet. The current sense of relief in the energy markets is largely due to the fact that we’ve been living off of floating storage and strategic reserves, along with some demand rationing. But the real shortages will eventually come. From the start, we said that the bigger fertilizer story will be with the global 2027 food crops, since the war started after much of the needed inventories were in place for Northern Hemisphere crops. We’re likely seeing some reduced application this year, but next year will be the bigger test, if this continues.

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Perspective: Morning Commentary for August 28

August 28 – New Fed Chair Kevin Warsh takes center stage today from the Fed’s annual Jackson Hole Symposium, due to provide his address in the next hour. The market will surely be parsing over his words with a fine-tooth comb, but it’s worth keeping in mind that his stated goal is for the Fed to provide less forward guidance and play a less prominent role, allowing the trade to “play the ball, not the referee.” With that said, my own expectation is to hear largely hawkish language as we did following the July Fed meeting as Warsh doubled down on the Fed’s stated commitment to its elusive 2.0% inflation mandate, which may drive volatility in rate expectations in the short-term, but keep in mind that expectations softened notably in the month that followed his hawkish comments. Not much has fundamentally changed since the Fed’s July meeting: inflation remains above target and the economy continues to expand, but a weak July payrolls report has introduced more concern around the labor side of the dual mandate. Yesterday’s jobless claims did give some renewed signs of resilience in the labor market to potentially aid in providing a permission signal to move rates higher, but I still expect the Fed to emphasize the need for patience. There is obviously plenty more impactful data on both inflation and the labor market sitting between now and the Fed’s September meeting, so much of the focus may also be attempting to discern longer-term changes to Fed strategy and positioning moving forward instead of just their immediate next step.

Mike CastleFri, 28 Aug 2026, 13:26

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Perspective: Morning Commentary for August 27

August 27 – The tech sector is breathing a collective sigh of relief, with the tech heavy Nasdaq poised for the biggest gains of the major indexes to start the day after impressive earnings results from Nvidia, Salesforce, and CrowdStrike after yesterday's close. This sigh of relief is also reflected in Wall Street’s fear index, with the VIX falling back below 15 for the first time this week. The dollar has slowly inched higher this week as it claws back portions of last week’s losses and is holding just above unchanged at the time of writing, trading just above the 99.16 level. Treasuries are quietly mixed to start the day, with 2-year yields down very slightly to trade at 4.222%, 10-year yields unchanged at 4.664%, and 30-year yields up slightly to trade at 5.188%. Crude oil is also just above unchanged to start the day, with nearby WTI up roughly 0.7% to trade near $82.50 while nearby Brent is up roughly 0.6% to trade near $87.50. The ags are largely mixed to start the day, with the wheat complex clinging to small gains while corn and soybeans are quietly lower.

Mike CastleThu, 27 Aug 2026, 13:21

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Perspective: Mid-Day Commentary for August 26

August 26 – It’s a quiet day on Wall Street despite the tranche of data released today, with focus shifting to chip giant Nvidia’s earnings report due out after today’s close. The major stock indexes are all quietly lower at midday, down anywhere from 0.25% to 0.35% at the time of writing, while the VIX remains muted as it hovers near 15.6. The dollar has firmed through the morning, reflecting some additional hawkish sentiment after this morning’s inflation data, as it trades at 99.17, its highest level since last Wednesday’s selloff. Treasury yields are working higher as well, with 2-year yields up to 4.23%, 10-year yields up to 4.668%, and 30-year yields up to 5.186%. Crude oil has reversed course from this morning’s losses to now trade in the green amid rumblings of more escalations in the Black Sea region as well as a more bullish than expected D.O.E. report this morning, with nearby WTI now up 2.1% on the day to trade near $82.80 and nearby Brent up 0.6% to trade near $87.80. The ags are surging higher at midday, with the wheat complex now leading the way higher amid additional concerns regarding supply from the Black Sea following wire reports stating Putin is planning escalation with Ukraine, though details to this point are scarce.

Mike CastleWed, 26 Aug 2026, 16:59

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