November canola is down $19.00/mt, December soybean oil is down .53 cents/pound, November European rapeseed is down 9.25 euro/mt and November Malaysian palm oil is down .32%. December oats are down 1 1/2 cents/bushel while November European corn is down 4.25 euros/mt. November crude oil is up $3.04/barrel, November ULSD is up $.0708/gallon, and the December Canadian dollar is down .00130 at .70845. The December US dollar index is up .237 at 100.945, and the December Brazilian real is down .00115 at 0.19140.

A much warmer and dryer extended forecast for the corn belt and Canadian Prairies has inspired aggressive profit taking ahead of month-end and the September 1 stocks report due out on Wednesday morning. That comes despite heavy rains expected for the corn belt this week that will only add to harvest delays and quality concerns there. The rain will help the winter wheat crop but that should pale in comparison to the bleak outlook for shipping from Black Sea ports for the foreseeable future.

Disappointment over soybeans being left out of the tariff reduction agreement between the U.S. and China is getting the blame for the break but nothing has changed with government owned importers still being able to avoid the additional 10% import tariff (and being very aggressive doing so). They have already purchased over 12 mmt or nearly half of the 25 mmt that they have committed to buying annually, so should have no reason to slow the pace going forward.

On the other hand, the announcement should have been bullish for the grain markets with import tariffs on corn, wheat and sorghum cut to standard most-favored-nation rates. It obviously doesn't ensure corn imports will resume but after years of China being absent from the U.S. export market while drawing down domestic stocks instead, it is a first step towards a return.

In the meantime, energy markets remain strong on concerns over an escalation of the Iran war as well as additional attacks by Ukraine on Russian energy infrastructure. That has intensified the selloff in treasury markets with the U.S. 10-year note yield jumping to 5.27% after being just 4.96% last Monday. Stocks have sold off further and the U.S. dollar has added to gains on the developments.

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