Perspective: Morning Commentary for October 20

By: Arlan Suderman, Chief Commodities Economist

Thu, 20 Oct 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

Perspective Morning Commentary will not be published on Friday, October 21.

October 20 – Stock futures had a positive bias to them overnight, ahead of this morning's weekly jobless claims data. However, they pulled back from overnight levels when the UK's Prime Minister Liz Truss stepped in front of the microphones to resign her position. It should be noted that the VIX continues its string of days above “30,” indicating that nerves are still very elevated on Wall Street as Treasury yields trend higher. That elevated fear level leaves the markets vulnerable as we inch closer to the Fed's next policy meeting at the beginning of November. Geopolitical risks are elevated as well, with fighting intensifying in Ukraine, while tensions with China are also rising as well. The dollar index is trading near 112.6 this morning. Yields on 10-year Treasuries are trading near 4.15% at this hour, after setting a fresh 14-year high of 4.18% earlier in the session. Yields on 2-year Treasuries are trading at 4.59%, after setting a fresh 15-year high earlier in the session of 4.61%. Crude oil prices are nearly 2% higher this morning on rumors that China will shorten its quarantine requirements for visitors that could speed up its recovery, which is also helping to give the grain and oilseed markets a lift as well.

First-time claims for unemployment benefits totaled 214K in the week ending October 15, down from 226K the previous week and well below analyst expectations that they would rise to 235K. That put the four-week moving average at 212.25K claims, up slightly from 211K the previous week. Continuing claims for the week ending October 8 rose 21K to 1.385 million. This number is still at historically low levels but is starting to trend higher. In fact, we need to see the unemployment rate rise in order to bring job openings more in balance with available workers seeking jobs to bring down wage inflation, which is a key to taming overall inflation. That fact receives very little discussion on Wall Street.

Could BRIC be expanding? Little coverage was provided to a key meeting in China in late June when the leaders of the BRIC nations (Brazil, Russia, India & China) met to draw out a plan for circumventing the Swift banking system and to establish a framework to encourage trading between these countries using the yuan as its central currency. The hope was that this plan would allow China and Russia to support one another with essential food and energy commodities in a world of sanctions from the West, including use of an alternative currency to the dollar. Saudi Arabia, a key member of OPEC, has now also reportedly indicated an interest in joining the BRIC coalition, amid increased tensions with the United States. Saudi Arabia had long aligned itself with the United States, providing it with oil in return for getting security assistance from the United States from its long-term foe Iran. However, the United States is threatening severe sanctions against Saudi Arabia following OPEC’s recent move to cut crude oil output by 2 million barrels per day. Saudi Arabia no longer sees the United States as a dependable friend, and it is considering realigning itself with Russia and China.

One-third of Ukraine’s electricity infrastructure is destroyed following this week’s barrage of air attacks from Russia, with water infrastructure also a target. Ukraine reports that Russia carried out more than 300 air strikes on Ukraine energy facilities since October 10^th. People in Ukraine are being asked to reduce electricity usage, and they are doing so, although some rolling blackouts are still required due to the shortage of power. Russia’s focus on Ukraine’s infrastructure across the country is aimed at killing the spirit of the Ukrainian people ahead of the winter. Otherwise, the focus is on Ukraine troops moving closer to Kherson, the only regional capital that Russian forces captured during this year’s war. Whoever controls Kherson controls the land access to Crimea, which Russia claimed in 2014. The bridge connecting Crimea with Russia has already been taken out by an attack earlier this fall. This fits within Ukraine’s plan of taking back Crimea from Russia, along with the other occupied territories as well. This region of the world had become the breadbasket of the world in recent years, providing food-based commodities to much of the rest of the world. Russia faces increasing difficulty exporting its massive production due to the sanctions, so it’s threatening to block extension of the deal that allows Ukraine to export food-based commodities as well when that agreement expires on November 22^nd.

Positive money flow supported the grain and oilseed markets overnight, based on the above news from China and from the Black Sea Region. Global supplies of corn, soybeans and wheat are snug, with little room for error. Soybeans have the best opportunity to grow themselves out of this tight situation if Brazil can grow a normal crop this year. The season started well, and continues to go well, but the extended models continue to show expanding dryness over at least half of the soybean belt by mid-November. That would be a problem if it verifies. Yet, day-to-day trading of the grain and oilseed markets is currently dominated by Algo computers focused on headlines and technical buy and sell signals, and on momentum trades. Low water levels on the Mississippi River remain a significant problem, with no notable improvement seen over the next several weeks. In fact, the situation may get worse.

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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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Energy
Dairy
Renewable Fuels
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Perspective: Mid-Day Commentary for August 6

August 6 – Stocks remain quietly mixed at midday as both the S&P 500 and Dow Jones remain just below their fresh all-time highs put in yesterday. This is allowing the VIX to cool to a four-week low below the 15.4 mark, reflecting the collective sigh of relief in the market amid largely better than expected U.S. economic data today. The dollar remains quietly in the green in its relatively tight range this week, trading at 99.9 at the time of writing. Treasuries remain elevated but have cooled from their recent peaks, with 30-year yields trading at 5.189%, 10-year yields trading at 4.647%, and 2-year yields trading at 4.229% at midday. Crude oil also remains quietly in the green, with nearby WTI up 2.3% on the day trading near $76.80 and nearby Brent up 2.4% on the day trading near $81.40. The ags remain mixed, with the wheat complex now squarely in the red while corn and soybeans cling to small gains, and the livestock complex largely pushes lower.

Mike CastleThu, 06 Aug 2026, 15:18

Grains & Oilseeds

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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