Grains

The USDA's August report is fairly neutral for corn and wheat while noting a negative outlook for soybeans. Grain prices have adjusted due to favorable weather in the U.S. Midwest and lower demand for corn, soybeans, and wheat compared to the pace of tightening U.S. ending stocks. Conversely, a stronger USD and lower energy prices have also contributed to the commodity price adjustment. China continues to have a significant influence on soybean and soybean oil prices. Ukraine's export situation is also causing increased volatility in corn and wheat prices. Additionally, increased supply from Indonesia and Malaysia and decreased demand from China are affecting global vegetable oil prices.

Stock Index Futures

Stock index futures reached a four-month high in August despite Federal Reserve officials discussing a faster rate hike schedule for this year. Comments from Fed officials have remained quite "hawkish" recently, even though inflation rates (measured by CPI and PPI) may have peaked. Some policymakers have indicated that a shift to a more "dovish" policy stance is unlikely.

U.S. Dollar Index

The U.S. Dollar Index rose to a 20-year high in mid-July as differing expectations about interest rates drove the greenback higher. The primary reason for the U.S. dollar's rise is that Fed officials have shown willingness to take more aggressive steps to control inflation, as most inflation measures have exceeded expectations.

Crude Oil

Crude oil prices peaked in early June before falling from $115 per barrel to around $85 per barrel, the lowest in three months, mainly due to weakened global demand. Additionally, the market has also declined significantly due to the impact of a weakening U.S. housing market and forecasts from some economists suggesting a signal of recession.

Gold

Gold futures have been trending higher since mid-July as several fundamental factors have become more favorable. The U.S. dollar has moved off its peak. Recent gains have been limited as Fed officials have ramped up their "hawkish" tone.