Perspective: Morning Commentary September 8

By: Arlan Suderman, Chief Commodities Economist

Mon, 08 Sep 2025, 13:35

September 8 – Stock futures were quietly firmer overnight, with traders expecting that this week’s inflation data to not be an obstacle to a Fed rate cut next week. The VIX is trading near 15 this morning, while the dollar index is trading near 97.5. Yields on 10-year Treasuries are trading near 4.05%, while yields on 2-year Treasuries are trading near 3.48%, as the market has been pricing in the anticipated rate cut. Crude oil prices are 1% higher this morning after OPEC+ increased output for October by less than what was feared. The grain and oilseed markets were mixed to firmer overnight.

Wall Street is convinced that the Federal Open Market Committee will cut its benchmark rate by at least 25 basis points next week. In fact, the market is pricing in expectations of three cuts by the Fed’s December meeting, while entertaining the possibility of a fourth cut. We’ll get key inflation data this week with the scheduled release of the producer price index on Wednesday and the consumer price index on Thursday. The closely watched CPI data is expected to show both headline and core inflation near 3%, which is well above the Fed’s mandate of 2%. The Fed’s new policy framework puts new emphasis on the need to keep inflation in check to create a healthy environment for the jobs sector. Yet, the Federal Reserve has fully prepared the market for a rate cut at this meeting, including comments made by Fed Chair Jerome Powell at the Jackson Hole Symposium in late August. In other words, the Fed has paved the way for this rate cut, just as it did a year ago when it shocked the markets with a 50-basis point cut at the September meeting. The Fed ended up cutting 100 basis points between September and December of last year, but ironically, yields on 10-year Treasuries went up by more than that amount during that time as investors fretted about inflation risks and fiscal spending. The point being, the same risk is still present, with fiscal spending still out of control and inflation inching higher.

BRICS leaders will hold a virtual meeting today to discuss a united response to President Trump’s tariffs. Brazilian President Lula invited Chinese President Xi to address the group when they meet. It’s yet to be seen whether the group can put together a united front that will impact the Trump tariff policy, but a unifying momentum is building within BRICS for members to join Xi’s battle against the tariffs after Trump recently put 50% tariffs on both Brazil and India. President Trump and President Xi are both expected to attend the Asia-Pacific Economic Cooperation summit in South Korea in October, where they are expected to meet. This opens the possibility that some type of trade deal might be worked out prior to that meeting for them to champion together, however, the two appear to be moving further apart rather than closer together. President Xi appears to be digging in his heels now that other nations are starting to join him in his battle, emboldened by the recent U.S. appeals court decision that deemed the reciprocal tariffs illegal. The White House admits that many nations have pulled back in their trade negotiations pending a decision from the Supreme Court on the validity of those tariffs.

China’s exports rose 4.4% year-on-year in August, despite a 33.1% drop in in shipments to the United States. Shipments to the European Union maintained momentum with a 10.4% rise on the year, while shipments to other Asian countries were up 22.5% on the year. Keep in mind that some of those shipments are actually transshipments to the United States via these other countries. It’s interesting to note that China’s exports to Russia were down 16.7% year-on-year in August, with year-to-date shipments to Russia down 7.9% from the previous year’s pace. China’s trade with Belt and Road Initiative countries are up 51.7% on the year. The data revealed that China imported 12.28 million metric tons (451 million bushels) of soybeans in August, up from 12.14 mmt the previous year, and 2.73 mmt above the five-year average for the month. January to August soybean imports total 73.32 mmt (2.694 billion bushels), up nearly 3 mmt from the previous year’s pace as China stocks up with supplies to carry it to Brazilian new-crop supplies five months from now. Known U.S. sales to China remain at zero at this point.

Temperatures dropped a couple of degrees below the freezing point in the northern Red River Valley over the weekend, burning top leaves on corn and soybean crops in the region. It will take some days to fully assess the impact to yields in an area expecting record production this year. A best-case scenario suggests that we’ll see some test weight loss, while a worst-case scenario would suggest some significant yield loss. While significant locally, the event does not appear to be a game-changer to the national crop, although it likely contributes to the anticipated erosion from the initial high yield estimates. USDA will update its balance sheets on Friday, with general expectations that yields erode lower, but demand will likely do the same as well. Look for USDA to take bushels back from its corn feed usage estimate, while its soybean export number should reflect the lack of sales to China as we get deeper into the new marketing year.

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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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