Perspective: Morning Commentary October 20

By: Arlan Suderman, Chief Commodities Economist

Mon, 20 Oct 2025, 13:35

October 20 – It’s day #20 of the partial government shutdown, but there’s little panic on Wall Street. The VIX remains elevated above 20, but it is slowly working its way lower as stock futures post modest gains. The dollar index is trading near 98.6 this morning. Yields on 10-year Treasuries are trading near 3.99%, while yields on 2-year Treasuries are trading near 3.46%. Crude oil prices are at fresh five-month lows to start the week, while the grain and oilseed sector was mixed to firmer, with soybeans leading the way on China trade deal hopes.

President Trump spoke optimistically last night about his anticipated meeting with China’s President Xi on the sideline of the APEC conference in South Korea next week. Trump indicated that he was optimistic about his chances of getting a trade deal done with China, while speaking specifically of soybeans, saying that he hopes that he can get them to at least purchase what they bought from us in the previous year. China imported roughly 841 million bushels of U.S. soybeans in the previous marketing year that ended on August 31. They haven’t purchased a bean since then. We estimate that they need roughly 367 million bushels of soybeans to fill the gap ahead of South American new-crop supplies arriving starting in February. U.S. Treasury Secretary Scott Bessent is expected to meet with China’s Vice-President He Lifeng in Malaysia this week for a round of talks ahead of next week’s meeting between Trump and Xi. The success of that meeting will set the tone for next week’s meeting of Trump and Xi.

There may be an agreement reached between China and the United States in the next week to 10 days, and that may result in the temporary movement of rare earth minerals and magnets to the United States and some soybeans to China. But the deal will not settle the conflict between the two countries. The differences are too great – rooted in two different values systems that are headed on a collision course. The Chinese Communist Party is bent on reaching its stated goal of global economic and military dominance, and the United States is determined to not allow that to happen. One side believes in central government control, and the other side believes in the freedom and power of the individual. China’s near monopoly of global supplies of processed rare earth minerals and magnets essential for military defense weapons, as well as the production of consumer goods, provides it with its most powerful leverage to pick global winners and losers. President Trump’s attempt to put mining and processing of these rare earth minerals on fast-track provides our best chance to undermine China’s leverage on the world. China’s not about to allow this window of opportunity pass for achieving its stated goals.

President Xi Jinping heads up the fourth plenum meeting that started today, which is focused on developing China’s goals for the next five years covering 2026 through 2030. This is a key set of meetings for setting the goals and objectives for the Chinese Communist Party over the coming five years. The meetings are expected to conclude on Thursday with the release of broader goals and objectives, but the details on how to reach these goals will need to be worked out in the coming months, to be released in March. Participants in these meetings include the Central Committee of the Chinese Communist Party, which is made up of 205 members. These are critical meetings for President Xi to assert his leadership within the Party, and historically they have presented opportunities for him to establish that power and authority within the party. They come just ahead of his meeting with President Trump next week. We probably won’t hear many specifics from the meetings, but we can be assured that the tone set at these meetings will have an impact on what we see from Xi’s meeting with Trump next week. He’ll likely take a strong stance in negotiations with Trump next week if he comes out of these meetings firmly in control, while he may be more interested in seeking an agreement if he senses cracks in the foundation of his power within the CCP. He may try to ease tensions with modest purchases of U.S. soybeans – China still has a deficit of 10 million metric tons ahead of new-crop Brazilian supplies arriving in February. That may be sufficient to help us reach USDA’s target for exports this year. But I do not expect China to yield an inch on exports of rare earth minerals and magnets for the production of defense weapons. China may allow low- to mid-grade rare earths for manufacturing of consumer goods conditional on users sharing proprietary production information in exchange for access. We won’t hear much about this publicly, due to national security reasons, but withholding rare earths needed for defense weapons will continue to be China’s primary point of leverage until the United States can gear up mining and processing.

Soybean prices rose overnight on President Trump’s China comments that raised hope of a deal. That helps set a positive tone for the grain and oilseed sector, but that’s still about all that they have to trade. We’ll get updates on export inspections later this morning, and ethanol production data on Wednesday. Otherwise, we remain in a data void until the government reopens. I estimate that the nation’s corn harvest is two-thirds complete, which is slightly ahead of normal, with soybeans 78% harvested, but we won’t know for sure until the government reopens.

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Perspective: Morning Commentary for August 4

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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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