Perspective: Morning Commentary November 6

By: Arlan Suderman, Chief Commodities Economist

Thu, 06 Nov 2025, 14:39

Today's Perspective Video: China Cuts Tariffs

November 6 – It’s day #37 of the partial government shutdown, and yet the sun rose once again over Wall Street this morning, which doesn’t seem to be too concerned yet at this point. That may change now that flights are being cancelled ahead of the Thanksgiving holiday travel season, but for now, no movement is seen in Washington. Stock futures posted modest gains this morning, after trading both sides of unchanged overnight. The VIX is trading near 18 this morning, while the dollar index is trading near 99.9. Yields on 10-year Treasuries are trading near 4.11%, while yields on 2-year Treasuries are trading near 3.58%. Crude oil prices tried to bounce overnight, after falling below support near $60 per barrel yesterday, but they’re struggling to sustain gains at this point. The grain and oilseed sector traded mostly lower overnight as the China trade deal encounters a few bumps on the road.

U.S. Transportation Secretary Sean Duffy ordered a 10% reduction in flights at 40 of America’s busiest airports late Wednesday to ease safety concerns in the wake of the partial government shutdown. Flight delays and cancellations have become a regular part of travel since the shutdown began on October 1. Air traffic controllers are not being paid during the shutdown, requiring many of them to seek other employment to pay their bills. That creates staffing issues, requiring a reduction of flights to enable existing flight controllers to maintain safety standards with the staff that they have available. The move gave airlines 36 hours to adjust flight schedules while working with ticketed passengers to adjust their travel schedules. The move comes just ahead of the Thanksgiving holiday travel period – the busiest of the year for travel. Yet, the filibuster on the Senate floor continues to prevent the funding bill from even reaching the floor for debate and for a vote.

China’s trade negotiator met with a U.S. Ag trade delegation in Beijing on Tuesday, telling them that U.S. unilateral tariff measures were the root cause hindering trade. In other words, it seemed that he was implying that the remaining 10% fentanyl tariff was a roadblock toward China removing the remaining 10% retaliatory tariff from U.S. products. This dispute remains a significant roadblock to China adhering to the agreement reached last week in South Korea, with the clock ticking on China’s ability to meet its obligations for the 2025 calendar year. The White House stated that China committed to purchasing 12 million metric tons of U.S. soybeans in 2025, with another 25 mmt in each of the next three years. That 12 mmt is critical to making the 2025-26 marketing year balance sheet work, since it already has an abundance of Brazilian soybeans booked for shipment after that. Without that demand in the current marketing year, the balance sheet becomes bloated. With it, demand keeps supplies snug. China has an abundance of cheaper new crop Brazilian supplies scheduled to arrive starting in February, so the opportunity to sell them U.S. soybeans is a narrow window over the next 60 days. Our cash sources suggest that China already has 20% of its needs covered for December and January arrivals, leaving roughly 8 mmt of demand yet to fill. China’s state buyers have reportedly purchased eight cargoes thus far, which is just 5% of the 12 mmt.

China’s soybean demand is also in decline. Declining crush margins are slowing crusher interest in soybean purchases. Soybean meal stocks at major crushing plants stand at 106K mt, up 12% year-on-year due to slower feed demand. Soybean supplies are backing up at the ports. China’s leading hog producing corporations are liquidating a portion of their herds due to declining demand, reducing feed demand in the process. Muyuan is China’s largest pig producer. It sold 7.08 million pigs in October, up 27% on the month, and up 13% year-on-year. China’s second largest producer is Wens. It sold 3.9 million pigs in October, up 46% on the year and its highest monthly total in a year as it reduces inventory. Reduced demand for pork meant that Muyuan sold its pigs for a price that was more than 32% lower than the previous year. Muyuan reduced its breeding herd by 10% from mid-year to the end of September in response to the weaker demand. All of this contributes to a weaker demand outlook for feed, including corn and soybean meal. And that raises headwinds for China keeping its obligation to purchase 12 mmt of U.S. soybeans in the current calendar year. Private crushers have zero incentive to purchase U.S. soybeans at current price levels, and China’s state buyers are being slow to do so as well.

Headlines continue to set the tone in both the grains and proteins. Yesterday’s gains on China’s 10% reduction in tariffs are becoming today’s losses – at least to start the day – on the realization that U.S. commodities still have significant obstacles to overcome before seeing any meaningful demand go into China. We’ve seen some cargoes of soybeans and soft wheat sold to China, but not yet enough to make a substantial difference, and the deal still hasn’t been signed. Farmers are nervous, and they’re selling incrementally into the recent rally, also creating challenges to sustaining this upward price move. It doesn’t mean that all is lost on the demand side, but it does mean that the market finds itself searching for the next headline to sustain the move.

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Perspective: Morning Commentary for August 4

August 4 – The benchmark Dow Jones Industrial Average surged into the close yesterday to finish almost 700 points higher, at a record close of 53,178 points – easily clearing the previous top from almost a month ago. The S&P 500 is on the brink of its own record as well, while the NASDAQ index is short of June highs but working on a strong three-session rally. All three are pointing to positive openings today. Palantir (a U.S. software company) reported better-than-expected earnings yesterday afternoon post-close to boost the tech sector, though a host of other firms reported strong earnings as well. The ten-year note continues to retreat from Friday’s high, now at 4.67%, with the dollar on the high side of level-par, while the VIX index now under 16 shows reduced volatility.

Matt ZellerTue, 04 Aug 2026, 12:43

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Perspective: Morning Commentary for August 3

August 3 – Equities futures are pointing higher to open the week and month, still in range of recent record highs and flush with optimism that the U.S. and others will start to negotiate with Iran over the Strait of Hormuz. A busy week is on tap with earnings reports and jobs data, among other economic releases. Crude oil is down over $5 per barrel and nearing in on three-week lows. The dollar is only slightly lower this morning but at its own month-and-a half low, while the U.S. ten-year note is also slightly on the low side at 4.68. The VIX index is rebounding a bit today after a sharp slide into the end of last week, just above 16.

Matt ZellerMon, 03 Aug 2026, 12:45

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Perspective: Mid-Day Commentary for July 31

July 31 – Stocks are clinging to modest gains at midday, with largely better than expected U.S. economic data today providing some optimism to end the week. The VIX briefly spiked to 18.7 earlier in the session but has since settled back to 17.15 at midday. The dollar has given back some of its gains on the day, now only modestly in the green, up roughly 0.1% to trade near 100.06 at the time of writing. Treasury action has been mixed thus far today, but yields remain notably elevated, with 30-year yields trading just below their 19-year high at 5.267%, 10-year yields just off their one-and-a-half-year high at 4.74%, and 2-year yields right at 4.30%. Crude oil remains quietly higher, with nearby WTI up 0.9% on the day near $84.70 and nearby Brent up 0.7% to trade near $87.40. The grains and oilseeds are widely lower at midday, with the wheat complex leading the way down, while the livestock sector is largely in the green.

Mike CastleFri, 31 Jul 2026, 16:33

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