January canola is down $7.00 per metric ton (mt), March soybean oil is down .45 cents per pound, February European rapeseed is down 2.50 euros per mt and January Malaysian palm oil is down 1.05%. December oats are up 1/2 cents per bushel. January crude oil is down $1.53 per barrel, December ULSD is down $.1035 per gallon and the December Canadian dollar is down .00350 at .71285. The December U.S. Dollar Index is up .501 at 99.950 and the December Brazilian real is down .00070 at 0.18690.

Commodities are all under pressure as midday approaches, with gains in equities now lost for the most part as well. It is starting to look more like a risk-off type of day than one influenced by a reallocation of funds out of commodities and into equities. The strong rally in the U.S. dollar would be normal in such a case, as would the gains in treasury markets that are currently being seen.

Soybean oil is doing relatively well considering the sharply lower energy markets, with canola down moderately along with soybeans, wheat and corn. Even cattle markets are getting hit again amid limited news or influential data. Soybeans seem to still be under the influence of "buy the rumor, sell the fact" type of trade following a USDA flash sale announcement this morning that China purchased another 330,000 mt of soybeans Tuesday.

Weakness in energy markets is somewhat surprising given the EIA weekly inventory report ended up with a 3.4-million-barrel drawdown of crude oil supplies instead of the 4.4-million-barrel build that the API suggested. Product totals were slightly bearish with a 2.3-million-barrel build in gasoline supplies instead of a very minor decline, while distillate (diesel) stocks were barely higher when a 1.5-million-barrel drawdown was expected. That still leaves supplies of the latter 7% below the 5-year average.

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