Perspective: Morning Commentary for October 26

By: Arlan Suderman, Chief Commodities Economist

Wed, 26 Oct 2022, 13:29

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 26 – Stock futures pulled modestly lower overnight, following recent significant gains on solid third quarter corporate earnings reports, although weak tech earnings from Alphabet and Microsoft weighed heavier on that sector amid this year’s sharp rise in Treasury yields. The VIX is trading near 28 this morning, after dipping below 28 for the first time in a month on Tuesday. The dollar index is also notably lower at 110.4 this morning, after probing below 110.0 for the first time in a month overnight. Yields on 10-year Treasuries are trading near 4.05%, while yields on 2-year Treasuries are trading near 4.45%. Crude oil prices are nearly 1% higher in early trade, while the grain and oilseed sector is mixed in early trade.

Microsoft posted its lowest sales growth in five years in its earnings report, with forecast revenue below Wall Street estimates. Furthermore, Alphabet (Google) reported disappointing ad sales, even as it warned of a slowdown in advertising spending. Wall Street analysts worry that the above provides further evidence of a slowing economy. Today’s weakness comes following several days of sharp gains on speculation that the Federal Reserve will slow the pace of rate hikes in the near future, although there is little evidence of such to this point. In fact, the market has repeatedly been wrong this year in forecasting a pivot by the Federal Reserve. Instead, the Fed has doubled down on its commitment to getting ahead of inflation, and I don’t see any signs that it is backing away from that stance. The Fed is expected to raise its benchmark rate another 75 basis points next week, but the market is currently split in its expectations on whether the Fed will raise the rate by 50 or 75 basis points at its December meeting.

Ukraine authorities believe that the overall export of agricultural products could reach 7.5 million metric tons in October, based on the fact that shipments exceeded 3.5 mmt in the first half of the month. Shipments totaled 6.9 mmt in September. It should be noted that these totals include all agricultural products, which goes far beyond bulk grain, and that the Ukrainian government has a reputation for being optimistic. Yet, the Ministry of Foreign Affairs of Ukraine continues to complain that Russia is slow walking the inspection of ships headed to Ukraine to load up with agricultural products. All ships going to Ukraine ports must be inspected at Turkish ports for weapons before they can continue on to the three approved Ukraine ports. However, inspection delays by Russian officials have more than 160 ships backed up waiting for inspection, slowing the movement of grain out of Ukraine. The current agreement allowing exports from Ukraine ports is set to expire on November 21^st. Ukraine, Turkey and the United Nations all speak optimistically about extending the agreement, but Russia is demanding changes to it before it will go along with an extension. It’s possible that we could see a stoppage of ships moving to Ukraine ports in early November so that there is time to get all remaining ships loaded and out to sea before November 21^st to reduce the risk of cargoes becoming trapped at the ports again like they were when the war started on February 24^th. Meanwhile, a German investigation revealed that Russia is in the process of exporting roughly 1.8 mmt of Ukraine grain captured from occupied territories through Crimean ports.

Russian President Putin was seen overseeing military drills today designed to simulate a nuclear retaliatory strike. The drills are intended to simulate “a massive nuclear strike,” according to Russian officials, in response to a nuclear attack on Russia. The drills are held annually by Russia, and it had notified U.S. officials of its intentions. Russia denies that it has any intentions to use nuclear weapons in its war on Ukraine, but it keeps bringing the subject up, raising the fear of a tactical strike. Logic would argue against use of these unconventional weapons in Ukraine, which is upwind from Moscow, but Putin’s erratic behavior during the war raises fears that he might choose to do so anyway to turn the tide of the war in his favor. That very possibility, as small as it might be, keeps grain traders wary of building short positions in the markets.

Wheat and corn prices traded both sides of unchanged overnight as those markets drift while waiting for clearer direction. However, soybean futures added to Tuesday’s strength with double-digit gains. The recent surge in U.S. soybean export shipments caught the attention of traders, even though the evidence suggests that longer-term export demand will fall short of USDA’s target if Brazil raises a normal crop. The rains came earlier to Brazil this year, with planting starting early as well. As such, early crop prospects are good, with harvest expected to start in December. However, the extended forecast started projecting widespread dryness over at least half of Brazil’s soybean belt starting in November, and that outlook continues to pull forward in recent updates, raising concerns.

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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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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: 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

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