Perspective: Morning Commentary for May 3

By: Arlan Suderman, Chief Commodities Economist

Tue, 03 May 2022, 13:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 3 – Volatility remains high as we move through Fed week, with this week’s change in monetary policy expected to set the course for the months ahead. Will this be a case of fear of the Fed being worse than the actual medicine prescribed by the Central Bank, or will policymakers have even stronger medicine than expected in store for the economy on Wednesday afternoon? The emotions ebb and flow ahead of Wednesday’s policy statement, with stock values reflecting those changes in sentiment. The VIX eased back to trade near 32 this morning, after surging to an eight-week high above 36 on Monday. The dollar index is trading near 103.1 this morning, which is just below last week’s 19-year high above 103.9. Yields on 10-year Treasuries are trading near 2.92% this morning, after matching yesterday’s 3-1/2 year high 3.01% earlier in the session. The Energy’s are mostly lower this morning, outside of the surging natural gas market, while the grain and oilseed market was mostly higher following big losses to start the week and the new trading month on Monday.

The top item on the minds of traders this week is tomorrow’s Federal Reserve policy statement to be released at 2 p.m. EDT, with a press conference 30 minutes later. The market’s interpretation of statements made by the Federal Reserve tomorrow will shape the filter through which all other economic and commodity supply and demand information will be viewed in the months ahead. A statement that eases the minds of traders could see a sharp break in the VIX, leading to a return of money flow into the commodity and equity markets, while a statement that increases their fears could see the opposite result. Those increased fears could come if the market interprets the monetary policy as being either too soft or too hard on the economy. However, the market in recent days seems to have leaned hard toward fears that the Fed will be too hard on the economy. How we close the week on Wall Street will tell us a great deal about how the markets interpret the results of this week’s Fed meeting.

China reported “just” 368 locally transmitted Covid cases on Monday, including 274 in Shanghai and 51 in Beijing. The number of new domestically transmitted asymptomatic cases was 5,647, including 5,395 cases in Shanghai. Those numbers are well-below levels seen a couple of weeks ago. As such, Shanghai, which has been in virtual lockdown since April 1^st, was believed to be getting close to a scaled opening again, with Beijing hoping to keep lockdowns to specific communities within the city. However, authorities are concerned about rising Covid cases over the past two days in unguarded zones that were presumed to be low-risk areas. That casts doubts on the ability of authorities to ease restrictions on the city any time soon. They had hoped to keep the virus within quarantine areas while they reopened the remainder of the city, but that plan looks doubtful now. Meanwhile, new cases in Beijing remain steady, as authorities there prepare new hospital facilities to deal with a possible spike in cases. Restaurants and gyms are closed for the Labor Day holiday that runs through Wednesday to slow the spread of Covid. Zhengzhou city, with 10 million residents, imposed restrictions following confirmation of two Covid cases, with four other asymptomatic cases, requiring mass testing of all residents over the next three days. All businesses will be closed except those deemed to be essential, and they define essential a little stricter than we do here in the States.

Ukraine’s grain trader union reports that farmers planted 31% of “expected” area thus far. The expected area is down nearly a quarter from 2021 due to the war, so they have planted 31% of the reduced area to this point. Spring planting progress to this point includes 180K hectares of spring wheat, according to UGA, along with 844K hectares of spring barley and 1.274 million hectares of corn. This year’s corn area is expected to total 3.9 million hectares, down 28% from the previous year due to the Russian invasion. Crops are being planted despite shortages of fertilizers and other products needed to maximize yield potential, with farmers wearing protective armor while in the fields, in many cases. Farmers fear that they will not have sufficient storage for the harvest, with exports through the ports expected to remain shut down until at least this fall, if the war were to end today, which it isn’t. Meanwhile, we continue to see reports of Russia targeting ports and other infrastructure, along with intentionally damaging or confiscating tractors and grain storage.

U.S. spring wheat planting is expected to remain particularly slow this month, which may result in lost acreage. Corn and soybean planting remains delayed as well, although the expectation remains that those crops will get planted. Unfortunately, many of those crops will likely be planted in less-than-ideal conditions that could hurt yield potential. This morning’s forecast maps suggest that we could see some improvement in planting conditions in the last half of the month. The late planting makes an above-trend crop much less likely this year, while adding risk that we could see below-trend yields. Meanwhile, corn yields in Brazil’s Mato Grosso, Goias and Mato Grosso do Sul are declining due to drought. Again, I do not expect a crop failure, but I do expect stress in the northern half of the safrinha corn area to see production decline by 5 to 10%, or more. That puts even more pressure on the United States to grow a good crop this summer.

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Perspective: Morning Commentary for August 6

August 6 – This morning’s stronger-than-expected U.S. labor data offered markets some relief, reinforcing confidence in the economy while giving the Fed greater flexibility to raise rates should inflationary pressures reaccelerate in next week’s July data. Stock futures are pointing to a mixed open to start the day, with the tech-heavy Nasdaq showing the most weakness. The VIX has fallen notably from yesterday’s spike above 18.4 as it starts the day hovering just below the 16-mark. The dollar is quietly higher as it trades just above 99.8, holding in the tight range seen thus far this week as traders continue to digest data to shape expectations for the Fed’s next move, which we’ll dive into in more depth below. Long-term treasury yields have relaxed slightly from their recent spike, with 30-year yields starting the day trading just above 5.19%, while 10-year yields trade above 4.64%, and 2-year yields sit below 4.22%. Crude oil is modestly higher to start the session after sharp declines earlier in the week, with nearby WTI up 1.8% to trade at $76.40 and nearby Brent up 2.4% to trade at $81.40. Meanwhile, the ags are quietly mixed to start the day.

Mike CastleThu, 06 Aug 2026, 13:24

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Perspective: Morning Commentary for August 5

August 5 – U.S. equities markets are on fire this week, with both the Dow Jones and S&P 500 setting new all-time highs yesterday with futures indicating further gains again today; the marketplace remains optimistic over a deal with Iran despite no evidence of such as of yet. Crude oil is working on a lower high and low today but remains slightly on the high side on the session, while the dollar is retreating back towards Monday’s nearly two-month low. The ten-year note is steady-to-lower this morning (though solidly lower so far this month) at 4.605%, while the VIX index continues to rebound into mid-week at almost a 17-point reading this morning.

Matt ZellerWed, 05 Aug 2026, 12:39

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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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