November canola is up $6.30/mt, December soybean oil is down 0.42 cents/pound, November European rapeseed is up 4.00 euros/mt and October Malaysian palm oil is down 0.19%. December oats are up 2 cents/bushel while November European corn is up 3.50 euros/mt. September crude oil is down $.33/barrel, September ULSD is up $0.0678/gallon, and the September Canadian dollar is up 0.00245 at 0.71465. The September U.S. Dollar Index is down 0.174 at 99.565 and the September Brazilian real is up 0.00085 at 0.19425.

Trading in ag markets going into midday remains a tale of two themes. Corn and the soybean complex remain weak with traders focusing on rains heading through the Central and Eastern Corn Belt while ignoring drought impacts on the Western Corn Belt crops.

Ag markets related to Europe and Ukraine have rallied as reports circulate that Russia has hit another three cargo ships in the Black Sea region. With that, U.S. wheat markets, European corn and rapeseed, and ICE canola have all gained throughout the morning. For more on the European corn situation, see Wednesday's blog at https://www.dtnpf.com/….

Helping the vegetable oil markets was a bullish EIA inventory report relating to the products. Diesel (ULSD) is leading the way higher on news that refinery rates pulled back more than expected, resulting in a 3.5-million-barrel drawdown in distillate inventories when a 400,000-barrel build was expected. That puts the current distillate stocks at 12% below the 5-year average, helping prices recover amid conflicting reports on progress in opening the Strait of Hormuz (or lack thereof). Crude oil remains lower with a surprising build being the result of the reduced refinery rates. Inventories increased 2.5 million barrels when a drawdown of 1.2 million barrels was expected. The SPR release for the week was an additional 2.8 million barrels, leaving the reserve with 304.8 million barrels, the lowest since early 1983 and approaching minimum operating levels (of approximately 300 million barrels).

Stocks and bonds have both turned mixed on the lack of progress in opening the Strait of Hormuz (as the Trump administration suggested would happen very soon on Tuesday) while the U.S. dollar remains under pressure.

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