Perspective: Morning Commentary for September 6

By: Arlan Suderman, Chief Commodities Economist

Tue, 06 Sep 2022, 13:20

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

September 6 – Stock futures pushed higher overnight, following a long three-day holiday weekend in the United States that saw global headlines continue to roll, even as the U.S. markets remained closed. Lockdowns continue to expand in China due to Covid, leading to more stimulus there, while Russia shuts off more natural gas to Europe. Even so, the VIX slipped below 26 this morning as a sense of contentment slowly emerges on Wall Street amid ideas once again that the equities may have priced in the bad news. The dollar index rallied to a fresh 20-year high just below 110.3 on Monday, before settling back to trade near 110.2 this morning. Yields on 10-year Treasuries are trading near 3.26% this morning, while yields on 2-year Treasuries trade near 3.48%, as that inverse spread continues to narrow. Crude oil prices are hovering just above key chart support this morning, while the Ags were mixed overnight.

Fears over weaker global demand weighed on crude oil prices over the weekend, even as OPEC+ decides to cut October output by 100K barrels per day. The problem is two-fold. The Covid-related lockdowns in China continue to cut consumption, while global recession fears do so elsewhere. Ironically, the drop in demand comes at a time when many OPEC members were believed to be near capacity for output, which would have argued for demand rationing with higher prices. Those issues will need to be dealt with once the global economy shows strength once again, but for now, OPEC+ is more concerned with stopping the bleeding in the crude oil markets. Their economies rely heavily on crude oil revenues to sustain their economic growth and their social programs.

Covid numbers are actually in decline in China, with “just” 264 locally transmitted cases identified on Monday, along with another 1,235 asymptomatic carriers. However, 33 cities in China are under partial or full static management due to Covid, impacting 65 million people. That raised some optimism in the Asian markets that the worst of the lockdowns and restrictions are behind us, although China will continue to battle these issues as long as it has a zero-tolerance policy until the day comes when its citizens have acquired natural immunity. There are hopes within China that authorities will transition out of the zero-tolerance policy after the 20^th meeting of Congress meets on October 16^th to re-elect President Xi Jinping to another four-year term, but that’s mere speculation at this point.

China has virtually covered its September soybean needs and is now working on its October and November needs, focused primarily on sourcing them from the United States. Cash buyers say that they have 80% of their anticipated October needs covered at this point, along with two-thirds of their November needs, while very little has been purchased for December or January thus far. That leaves an estimated 11.5 million metric tons of coverage needed yet, but traders are holding off making those purchases while they monitor the start of the growing season in Brazil, where soybeans can’t be planted before September 15^th in the key production areas. Rains are expected to remain limited in the northern half of Brazil’s soybean belt over the next two weeks, likely delaying seeding for at least a third of the belt.

Europe may be facing its worst gas supply crisis in history, but things are a bit calmer today as traders contemplate the latest news regarding supplies from Russia. The Nord Stream 1 pipeline is shutdown today, although Russia says that the partial flow that had been moving through the pipe will resume once faulty equipment is repaired. Russia blames the shutdown on repairs needed to be done by Siemens Energy, but Reuters reports that Siemens Energy says they are not currently commissioned by Russia to do the maintenance work, stating that the mentioned engine oil leak on the turbine that was shut down does not constitute a reason for shutting down the pipeline. The Kremlin blamed the shutdown on the sanctions that hinder its ability to do repairs. Those sanctions haven’t stopped the flow of crude oil out of Russia, providing it with ample revenue, but they have stopped Russia from importing what it needs to repair everything from military equipment to farm equipment, slowly bringing its economy down.

Argentina offers a 200:1 peso to dollar ratio to farmers selling soybeans to get them to sell this month, in order to rejuvenate foreign reserves for making debt payments. This is a band-aid approach to the problem, but it represents the growing global credit risks building for countries with dollar-denominated debt as the greenback soars to 20-year highs amid a slowing global economy. Near-term, the Argentine policy change could see an increase in soymeal and soyoil available on the world market, but longer-term the decision represents the growing problem that Argentina will have competing on the global market. Here in the states, we should see a steady flow of private production estimates this week, with the market increasingly focused on Monday’s USDA WASDE crop report, which will contain the agency’s first corn and soybean production estimates based on actual field samples. Current market expectations are for the corn crop to continue trending smaller, while the soybean crop remains near trend levels for at least one more report. This is being traded within a broader context of a recessionary money flow mentality for the commodities.

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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

Grains & Oilseeds

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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Morning Grain Comments 8-7

Morning Grain Market Comments - Matt Zeller

Matt ZellerFri, 07 Aug 2026, 11:56

Grains & Oilseeds

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