Perspective: Morning Commentary for November 2

By: Arlan Suderman, Chief Commodities Economist

Wed, 02 Nov 2022, 13:32

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

November 2 – Stock futures drifted quietly lower this morning ahead of this afternoon’s updated monetary policy statement from the Federal Reserve, with a bit of added selling when the private sector jobs report came out this morning. The VIX traded either side of 26 overnight, while the dollar index slipped lower to trade near 111.2. Yields on 10-year Treasuries are trading near 4.04%, while yields on 2-year Treasuries are trading near 4.53%. Crude oil prices are modestly lower in early trade, while the grain and oilseed markets turned notably lower on news from the Black Sea early this morning.

The private sector created 239K jobs in October, according to today’s ADP employment report. That’s well-above the average trade guess of 200K jobs created, and even above the largest submitted guess of 225K jobs. ADP revised its September number to 192K jobs created, down from the 208K originally reported. The correlation between ADP’s monthly number and the government’s non-farm payroll number released on Friday isn’t as strong as analysts would like to see, but today’s number from ADP does suggest that employers were actively hiring in October. The Federal Reserve is likely to look at today’s numbers, combined with data released on Tuesday, to justify maintaining their current pace of monetary tightening, which is one reason why stock futures added to their losses following the data’s release this morning.

The market puts 90% odds on the Fed raising its benchmark rate by 75 basis points today. Traders would be very surprised by anything different, as would I. However, traders are evenly split on whether the December rate hike will be another 75 basis points, or whether it will “just” be 50 basis points. That will be one of the big focal points this afternoon. Traders will be looking for any words used or deleted in the policy statement that suggest that the Fed will be slowing the pace of rate hikes at future meetings, while also parsing the words at Fed Chair Jerome Powell’s press conference for evidence of the same. I would not be surprised to see Powell say that the Fed will follow the data and that it will pivot when the data provides justification for doing so. The market may interpret that as the Fed being on the cusp of pivoting, but I think policymakers will need to see a more significant turn in the data before they actually do so, especially if Friday’s monthly employment report confirms a strong jobs market. Analysts currently expect Friday’s report to show that the economy created 210K non-farm payroll jobs in October, with the unemployment rate ticking higher to 3.6%.

China is changing its tone on Covid, but not necessarily its actions. As for the latter, authorities issued a lockdown order to the economic zone surrounding the Foxconn plant in Zhengzhou for seven days. That’s a reversal from its previous policy, suggesting that the current Covid outbreak in the region is more severe than previously reported. However, the markets are responding positively to comments made by expert Wang Fusheng that have been widely reported in state media. Fusheng stated that Covid is a “self-limited” disease that is relatively mild for most people, with more than 80% of infected people having mild symptoms or are asymptomatic who recover even if they do not get treatment. Even those severe patients can also recover well with timely and proper treatment, according to Fusheng. The fact that his comments were allowed, and even quoted by state media, added fuel to rumors that authorities are considering opening China’s economy again. We’ve heard this before, but such a move if true could fuel a surge in demand for commodities once again. China’s economy continues to be hampered by its dynamic-zero Covid policy, with speculation that could change by March of next year.

Russia did an about-face today, saying that it will again participate in the grain trade deal that allows cargoes to depart from Ukraine ports. The move surprised traders this morning, sending grain prices sharply lower. Credit was given to Turkey and to the United Nations for providing written guarantees from Ukraine that it would not use the “grain corridor” to conduct military hostilities against Russia, but no confirmation was seen that this was true. The agreement is still set to expire on November 19 unless it is extended, so negotiations will continue. This will continue to maintain some doubt in the minds of traders, but for now, the grain is flowing again. I must admit that I am surprised by today’s move by Russia. I was surprised when it agreed to the agreement in the first place and was surprised that it took so long for it to suspend participation. This has the appearance of a country that is suddenly concerned about how others view it in the world, which suggests that things are not going well for President Putin. It doesn’t fit his personality to be worried about what others think about him, but that’s what this appears to suggest.

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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

Grains & Oilseeds

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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Morning Grain Comments 8-7

Morning Grain Market Comments - Matt Zeller

Matt ZellerFri, 07 Aug 2026, 11:56

Grains & Oilseeds

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