Perspective: Morning Commentary for October 10

By: Arlan Suderman, Chief Commodities Economist

Mon, 10 Oct 2022, 13:31

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 10 – Russia and inflation are the two hot topics to start the week. Tensions are rapidly escalating in Ukraine as Russia seeks to turn the tide again and we’ll get key inflation data on Wednesday and Thursday of this week, which is expected to influence the Federal Reserve when it meets in three weeks. But for today, a federal holiday means that we’ll see a void of economic data, leaving traders to monitor headlines from the Black Sea Region. Stock futures fell before rallying overnight, while the VIX traded either side of 33 reflecting the elevated levels of fear on Wall Street. The dollar index firmed to trade near 113.0 as the greenback gains upward momentum again. Yields on 10-year Treasuries are trading near 3.88% - getting closer to 4.0% again – and yields on 2-year Treasuries traded near 4.31%, which was just below last month’s 15-year high. Crude oil prices posted a fresh five-week high before pulling modestly lower this morning, while the grain and oilseed markets surged higher on the geopolitical risks involving Russia.

The only bridge linking Russia to Crimea, and Europe’s longest bridge, used to transport troops and equipment was bombed over the weekend, leading to a flurry of attacks across Ukraine during rush hour this morning, targeting civilians and key infrastructure across the country. Russia fired cruise missiles at cities spread across Ukraine this morning in retaliation to the weekend bridge attack, raising fears in the marketplace about what additional steps Russian President Putin might take to turn the tide of the war back his way, after witnessing loss after loss for Russia forces in recent weeks, and while enduring a rapid erosion of support at home within Russia. Today’s strikes appeared targeted toward inflicting the greatest damage on both civilians during rush hour, as well as on infrastructure, leaving significant areas of the country without power, water, or heat. Ukraine claims that Russia fired 81 missiles at it, with 43 of them shot down by Ukraine’s air defense. Belarus President Alexander Lukashenko also stated that he would be activating soldiers in coordination with Russian forces near his border with Ukraine. Global leaders and market participants continue to worry that Putin might implement strategic nuclear strikes to further turn the tide back his way if the above efforts fail to do so. That risk may be less than 50%, but the fact that the risk exists at all worries observers.

Europe must again adjust to the escalating war in Ukraine, knowing that it could be a long hard winter with high energy costs. Demand for electric blankets has surged across Europe as consumers seek ways to keep their thermostats lower this winter amid record high prices for energy. One energy company seeks to give away 10,000 blankets to consumers in its trade territory. Other consumers who do not qualify can buy them at a 50% discount. The blankets, containing copper wiring, are made in China, re-emphasizing the need to keep supply chains coming out of China functioning as we head into winter.

China reopened today following its week-long “golden week” holiday, which was negatively impacted by China’s zero-Covid policy. Early data shows that 422 million people traveled domestically during the week, down 40% from pre-Covid levels, with travel revenue down 26% from last year, and down 55% from pre-Covid levels. The 20^th Congress of the Chinese Communist Party will meet on October 16^th. Speculation initially had been that China might ease off of its zero-Covid policy following the meeting of Congress to reappoint Xi Jinping for another term as president, which would allow China’s economy to open again. But observers are much less optimistic now that we will see significant reform, with government officials seeming to believe that they are currently on the right path. Meanwhile, there’s been more of a conciliatory tone from both Taiwan and Chinese authorities in recent days, cooling the rhetoric, even though China remains committed to eventual “reunification” of the island nation.

Grain and oilseed prices posted solid gains overnight, led by wheat, as risk premium focused on rising Russian tensions sent sellers for cover while buyers returned to add ownership. This continues to be a headline-driven market, which for now supports positive money flow. The cash market is focused on big feed deficits in the major feedlot states of the western Ag belt, as well as the explosion of barge freight rates due to extremely low water levels on the Mississippi River. No barges were backed up at Memphis this morning, where one-way traffic only is allowed, and where the backup topped 2,000 on Friday after a barge became grounded. Grain movement south to the ports and fertilizer movement north for fall application are both curtailed. One major grain shipping company warned today that grain shipments coming from the upper Mississippi River should be completed as soon as possible if they are going to arrive in time before the upper portion of the river starts to shut down for winter next month. Forecasters fear that water levels on the lower Mississippi will get worse before they get better, with no major rain events currently in the forecast for the Midwest. Wheat futures price have been trending higher since mid-August, and they continue within that up trending channel. Corn futures have largely been trading sideways over the past month, while soybeans have been in a sharp selloff until bouncing off chart gap support at the end of last week. USDA production estimates are updated on Wednesday.

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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

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
Cotton
Sugar
Meats & Livestock
Forest Products

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Mike CastleThu, 06 Aug 2026, 13:24

Grains & Oilseeds
Energy
Dairy
Renewable Fuels
Cocoa
Coffee
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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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