Perspective: Morning Commentary October 2

By: Arlan Suderman, Chief Commodities Economist

Thu, 02 Oct 2025, 13:27

Today's Perspective Video: Shutdown Chaos: Are the Markets Flying Blind?

October 2 – We’re still in a partial government shutdown, but both the S&P 500 and Nasdaq index stock futures suggest that new record highs are possible today. The VIX is trading near 16 this morning, while the dollar index is trading near 97.7. Yields on 10-year Treasuries are trading near 4.12%, while yields on 2-year Treasuries are trading near 3.57%. Crude oil prices are 1% lower on over-supply concerns after falling to fresh four-month lows near $61 this morning, while the grain and oilseed markets are mixed, but with firmer undertones this morning.

We’re in day #2 of the partial government shutdown. The Energy Information Administration continues to turn out reports, but most other government reports are on hold. That means that we received no weekly jobless claims data this morning, nor do we expect to see the government’s monthly jobs report tomorrow. In the Ag sector, no weekly export sales report was released this morning. USDA indicates that it won’t release any reports until funding is restored, and that could lead to a delayed or cancelled WASDE crop report, as happened in October 2013, and again in January of 2019. The latter shutdown went for 35 days, so the cancellation of that WASDE report was understandable. The 2013 shutdown went for 16 days, pushing the reopening close enough to the November report that USDA decided to skip the October report. A critical component of the October report will be the production estimate based on actual field sampling done by USDA-NASS. It’s workforce was already reduced by half with the buyout program, but remaining scouts were likely in the field for some days prior to the shutdown. The question is, when will the shutdown end? Senior management at USDA generally wants to get WASDE reports out if at all possible, but October is also a busy month for them as they begin work on the baseline projections mid-month.

The CME FedWatch reflects 99% odds of another rate cut by the Federal Reserve later this month, following yesterday’s private sector jobs report showing that the economy lost 32K jobs in September. It puts 87% odds of yet another rate cut in December. The partial government shutdown looks to continue a bit longer, which means that we likely will not see the government’s monthly jobs report tomorrow. Weekly jobless claim numbers – once they start up again – are expected to reflect a large number (around 154K) of former Federal civilian employees who took the buyout option earlier this year. Those buyouts expired at the end of September. The November 7 monthly jobs report is also expected to reflect those buyout employees who have not retired or found other jobs. That could result in a negative number for the month, while also pushing up the unemployment rate as high as 4.4%. Roughly 640K Federal workers could be furloughed by the current shutdown, possibly pushing the unemployment rate as high as 4.8%, depending on how those workers are classified. That’s still an historically low rate, but it would provide the Fed with the cover it needs to justify more rate cuts – at least that’s how Wall Street is thinking.

Soybean prices led the grains out of a hole Wednesday when President Trump posted on Truth Social that he would be meeting with Chinese President Xi at the APEC meeting in South Korea in four weeks. He went on to state that he will make soybeans and Ag products a high priority in those talks, closing with a statement, “Make soybeans, and other row crops, great again!” That encouraged the bulls in the grain markets, that at least Ag was back on the president’s mind in these negotiations, and soybeans specifically. Wheat export sales are the strongest they’ve been in more than a dozen years, while corn export sales are at a record pace. Yet, soybean sales remain quite sluggish due to the absence of Chinese buying. President Trump’s comments raise hopes that we could get a trade deal with China that would again force it to buy U.S. soybeans, but that’s at least another four weeks away. Ironically, China could buy up supplies during the government shutdown and go under the radar in the absence of the daily flash reporting system. I don’t expect it to do so, but that’s a possibility. Yet, Trump and Xi won’t be talking for another four weeks. Assuming they reach a deal then, which is a stretch, Chinese crushers wouldn’t be expected to buy until after that point. The earliest they could line up delivery would be December, and by that time we’ll be close to the availability of new-crop Brazilian supplies. The deal could still “require” large Chinese purchases, but it already has large quantities of new-crop Brazilian supplies booked for delivery in the first half of next year. That could push those deliveries of U.S. supplies even further back. The bottom line is that China doesn’t “need” to buy U.S. soybeans as long as Brazil keeps expanding production. We can force it to do so if we give them a big enough carrot, such as favorable access to our vast consumer market, or if yield Taiwan, but I remain a skeptic for now.

StoneX pegged the U.S. corn crop at 185.9 bushels per acre late Wednesday, down 1 bushel from September, after revealing the results of its latest customer survey. The soybean yield rose to 53.9 bpa, up 0.7 bushels from last month. Other private estimates are expected in the days ahead. The bottom line though is that both of these yields keep the markets well supplied, particularly following USDA’s bearish corn stocks estimate on Tuesday.

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Matt ZellerTue, 04 Aug 2026, 12:43

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Mike CastleMon, 03 Aug 2026, 15:10

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