Perspective: Morning Commentary for September 22

By: Arlan Suderman, Chief Commodities Economist

Wed, 22 Sep 2021, 13:30

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 22 – Stocks were upbeat overnight, riding a tide of optimism fed by reports that Evergrande will be making tomorrow’s required interest payment. The VIX traded below 23 this morning as calm eases back across the Wall Street landscape, while the dollar index traded steady near 93.2. Yields on 10-year Treasuries are trading near 1.32% ahead of today’s Federal Reserve monetary policy statement. Crude oil prices are more than 1.5% higher after a private sector report showed another large drawdown in crude supplies following Hurricane’s Ida and Nicholas. The Ags were mostly higher overnight as well.

China’s Evergrande reportedly agreed to make its required interest payment due tomorrow, easing concerns for now. Another $47.5 million payment is due next week on the 29^th. We can’t confirm that Evergrande will be paying the full $83.5 million, but rather that it had reached a private agreement to resolve tomorrow’s obligation. Reuters noted that Evergrande would not immediately respond to questions concerning the details of that negotiated deal. Observers noted that Evergrande might still miss the coupon on offshore bonds that are due tomorrow, according to Reuters. The wire service reports that just some $20 billion of Evergrande’s stated $305 billion in debt is owed offshore. China’s central bank also took action to calm the markets by injecting another 90 billion yuan into the banking system.

The primary question is Evergrande the next black swan event to undermine the markets, with the contagion outside of China. Only hindsight will answer that question, by the very definition of a black swan event. However, I reached out to Darin Friedrichs of our Shanghai office for his perspective on Evergrande’s impact. He pointed out that Evergrande’s problems are certainly real, and it poses a risk of economic and financial damage. But it’s been the baseline assumption of many observers for the past 15 years that property prices in China would eventually collapse leading to China’s collapse. This makes it hard to objectively assess the situation. Many people in China will downplay the risk, for obvious political reasons, while the opposite is true for people outside of China. Friedrichs notes that Evergrande has widely been known to be heavily leveraged for years. That’s not a surprise. However, the foreign markets have generally reacted more than China’s markets. He points out that the bottom line is that money needs a home, and that usually means investing in housing. China has capital controls, and relatively under-developed stock and bond markets. As such, a lot of money ends up going into housing, regardless of Evergrande or whoever else is failing. The scale of Evergrande is concerning, but he notes that China has a long history of property developers taking on too much leverage, going bust, and so far, it hasn’t led to a broader economic contagion. I would add that sorting out fact from fiction from emotion is a challenge when it comes to evaluating risks in China, especially for investors outside of China, which leads emotions to often have the upper hand.

The Federal Reserve now garners Wall Street’s focus ahead of this afternoon’s anticipated policy statement and press conference. Several members of the Fed have been apparently pushing, via their public statements, Fed Chair Jerome Powell toward releasing a schedule for tapering at this meeting. We did not get the feared collapse in the Chinese markets overnight over Evergrande, so the hawks may have the edge in today’s meeting. That leaves the debate over whether inflation or the pandemic is the greater threat to the economy. I would argue that Modern Monetary Theory may be the greater threat, but that’s a discussion for another day, although they’re all related. The statement released at 2 p.m. CDT will reflect the majority of the board’s positions. The vote count will show the degree of solidarity on the board. Jerome Powell’s word choice during his press conference is expected to reflect his bias. The minutes of the meeting, when they are released in three weeks, will provide greater clarity in the board’s agreement, and/or dissent, although today’s famous dot plot graphic may provide some clues as well.

The broader commodity sector bounced overnight, amid the easing global Evergrande concerns. End users are stepping in to buy the break in the grain and oilseed sector, along with some speculative bottom picking. Seasonal harvest pressure is upon us though, with the Midwest forecast pretty open for the bulk of the next two weeks. Confidence is also growing that showers will increase over dry areas of Brazil once we turn the calendar to October, allowing for a relatively normal start to the planting season there. The bulls need to see U.S. export shipments increase, which they should over the next several weeks, but they also need to see evidence of lower U.S. yields. That’s yet to be determined, with reports thus far pretty mixed – some better and some worse than expected.

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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: 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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