Tariffs, Trade Risk, and Market Volatility: Arlan Suderman’s June 2025 Commodity Outlook

Suderman Warns on Inflation, Trade Disruptions and Fragile Grain Markets

Key Takeaways:

• Tariff strategy and trade uncertainty are reshaping inflation expectations and global commodity demand
• China’s rare earth leverage and U.S. policy delays are driving volatility in energy and ag markets
• Tight stocks and weather risk mean even small yield losses could trigger price rationing this season

With the return of tariff-driven trade tensions, StoneX Chief Commodities Economist Arlan Suderman delivered a sobering yet rational outlook on the June 2025 WASDE and broader commodity landscape in his latest webinar, “Commodity Outlook in a Trump Tariff World.” Suderman laid out the core market theme in simple terms: price is a function of supply and demand, but modified by the flow of money. That flow is increasingly shaped by political decisions—none more influential than the Trump administration’s reciprocal tariffs.

Market Reactions: Between Panic and Progress

Suderman noted that while April saw markets fear an all-out trade war, sentiment has shifted toward a more measured, deal-making outlook. But volatility remains. “We’re probably somewhere in the middle,” he said, referencing a Trade War Continuum slide from the presentation. It shows a spectrum from global recession to economic expansion based on tariff outcomes, underlining just how speculative current pricing can be.

Chart of Trade War Continuum

 

Source: Arlan Suderman

Suderman explained that tariff impacts are not yet fully visible in inflation data. Consumer inflation expectations have surged, but core CPI remains relatively stable, and markets are pricing in lower inflation over the next two years. This divergence is visible in the StoneX Commodity Tracker vs. US 2-Year Breakeven Inflation Rate which shows a correlation divergence between the inflation forecast measure and commodity price index.

Chart of StoneX Commodity Tracker and US 2 Year Breakeven Inflation Rate (Daily)

 

Source: Arlan Suderman, Market Intelligence Interactive Reports

China’s Long Game, Rare Earths, and Commodity Leverage

On China, Suderman cautioned against expectations for a broad trade deal, highlighting a strategic stall by President Xi’s administration. China’s rare earth mineral leverage—used in everything from EVs to weapons systems—has emerged as a key bargaining chip. As Suderman emphasized, “They’re keeping it as a leverage tool.” This adds long-term risk to global commodity supply chains, especially in tech and defense.

Tariffs, Biofuels, and USDA Forecasts: Near-Term Implications

Markets are waiting for clarity on Renewable Volume Obligations (RVOs), which could shift corn and soybean demand. Used cooking oil imports from China have already dropped nearly 100%, pushing up demand for domestic tallow, fats, and oils. This, along with tightening global grain and oilseed stocks, adds upward pressure on prices. In his breakdown of USDA estimates, Suderman flagged risks around overstated export projections and underappreciated weather volatility. He warned that even a 5% drop in corn yield could force rationing. To underscore that point, the 30-Day Rainfall Map shows exceptional rainfall in the Midwest—helpful now but setting up for flash drought risk if conditions shift.

Chart of 30-Day Rainfall

 

Source: Arlan Suderman, Commodity Weather Group, Market Intelligence

Watch the June episode on demand here.

 

Dive Deeper

Don’t miss Arlan’s monthly analysis and insights. Register today and receive advance notification before the next Commodity and Economic Outlook webinar.

Register Here

 

–– Written by: Andy Catsimanes
–– Expert: Arlan Suderman, StoneX Chief Commodities Economist