Perspective: Morning Commentary for October 4

By: Arlan Suderman, Chief Commodities Economist

Tue, 04 Oct 2022, 13:24

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

October 4 – The rebound continues on Wall Street amid ideas once again that the world has reached peaked monetary tightening policy. That may or may not be reality, but in the world of the markets, perception is reality. For now, Treasury yields are coming down, and equity traders see that as evidence of a shift in central bank monetary policy. What it means is, the recent yields were attractive to risk-adverse investors. The optimism lifted both stock futures and a broad sector of the commodities overnight, with the VIX slipping just below the pivotal 30 level to trade near 29. The dollar index traded notably lower to 111.0 this morning. Yields on 10-year Treasuries are trading near 3.60% this morning, while yields on 2-year Treasuries are trading near 4.06%. Note that the inverse remain large between the two. Crude oil prices are 2% higher, while the grain and oilseeds were mostly higher as well.

Market emotions ebb and flow, and that is certainly the case currently. Once again, market sentiment shifted toward optimism that central banks around the world would take their foot off the brakes of monetary tightening. Several events triggered the shift in sentiment. The United Kingdom reversed its position on tax cuts, U.S. manufacturing data came in weaker suggesting a slowdown in the economy, high European energy prices pulled back, and the Australian central bank posted a smaller rate increase than anticipated. None of this indicates that inflation has been put back into the bottle. We can’t know that with certainty as long as massive amounts of stimulus remain in the system so that consumers can go back to aggressive spending once their fear levels retreat. Yet, global traders don’t think that central bankers have the courage to sustain monetary tightening through adversity – and they may be right. So far, the Federal Reserve has repeatedly surprised traders in 2022 by its tenacity in holding to its commitment to get inflation under control, even in the face of fiscal stimulus working against it. No less than five Fed members will be speaking publicly today, providing them an opportunity to impact market sentiment. Their next formal meeting for shaping policy is still four weeks away. This market is very headline driven these days, so Fed member comments can have a significant impact on market direction – turning on a dime. The ebb and flow continues, and it will likely continue for quite some time.

Ukraine continues to build momentum in southern and eastern parts of the country – retaking territory previously occupied by Russian troops following Russia’s invasion in February. Ukrainian forces reportedly pushed through Russian defenses in the south, while consolidating their hold on territory around Lyman in the northeast and pushing further into neighboring Luhansk. These are part of the regions that President Vladimir Putin declared annexed to Russia on Friday. Ukraine reports that Russian troops are increasingly seeking to escape from the conflict. Russia claims that it has conscripted an additional 200K soldiers to join the fight, but their training was quick, and considered to be inadequate for the intense fighting that they’re facing once they arrive in Ukraine. Meanwhile, farmers in Ukraine continue to plant winter crops for harvest in 2023. Ukraine’s Ministry of Agriculture reports that 1.1 million hectares of winter wheat has been planted, which is 27% of the intended acreage this year. Overall wheat planting is expected to be down roughly another 20% this year due to the difficulties of war. Barley planting progress is at 96K hectares, or 14% of the intended area. Rye planting has occurred on 35K hectares, or 41% of the intended area. Observers report that 265 vessels have hauled grain and other products out of three Ukraine ports through the “grain corridor” set up this summer, containing 5.9 million metric tons of agricultural products. That total included 2.75 mmt of corn and 1.70 mmt of wheat.

StoneX releases the results of its October customer survey of U.S. corn and soybean yields this afternoon after the markets close. This will be the first of several private estimates scheduled for release ahead of next week’s USDA crop report on the 12^th. I have not seen the data, so do not read anything into my comments. I do not know which way the survey data is leaning. I can say that market expectations are starting to prepare for the possibility that USDA will hold the line, or even bump its yield estimates next week, based on anecdotal harvest results being circulated through the Midwest. That could happen. However, I generally see crop ratings rise through harvest when that occurs as those filling out the surveys respond to what they’re hearing locally. Instead, we’re seeing condition index scores continue to trend lower. As a result, my yield model based on those ratings dropped its corn yield to 168.0 bushels per acre this week, with my soybean yield model falling to 51.5 bpa. The yield models tend to not pick up on changes in seed size very well. We know that seed size was a real problem in areas that lacked rain in the west, but seed size was large in areas that received rain. How they balance each other out will shape the U.S. yield.

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Perspective: Morning Commentary for August 11

August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.

Arlan SudermanTue, 11 Aug 2026, 13:21

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Perspective: Morning Commentary for August 10

August 10 – The world commodity markets and economy remains at risk amid two wars this morning. Tensions continue to escalate in both the Middle East and the Black Sea – risking pulling other countries into the conflicts. Stocks are down modestly this morning as we start a week of trade in which we’ll see key inflation and retail sales data following a weak jobs report this past Friday. Yet, stocks continue to trade just below record high levels, with the VIX trading near 2026 lows just above 15. The dollar index is trading near 99.7. Yields on 10-year Treasuries are trading near 4.68%, while yields on 2-year Treasuries are trading near 4.23%. The energy and food-based markets are firmer today amid the escalated risks. WTI crude oil is trading near $80, while Brent trades near $85 per barrel. Double-digit gains in the winter wheat markets lead the way for higher grain and oilseed prices.

Arlan SudermanMon, 10 Aug 2026, 13:51

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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

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