May canola is up $4.10/mt, May soybean oil is up 0.84 cents/pound, May European rapeseed is up 5.50 euros per mt and April Malaysian palm oil is up 0.82%. May oats are up 8 1/2 cents/bushel. April crude oil is up $8.13 per barrel, April ULSD is up $0.2186 per gallon, and the March Canadian dollar is down 0.00150 at 0.73450. The March U.S. Dollar Index is up 0.395 at 99.620 and the March Brazilian real is down 0.00170 at 0.19125.

Confrontational and defiant rhetoric from leaders on both sides of the conflict inspired additional gains in early trade, with crude oil up by almost $10/barrel at one point. That, combined with quality issues in the Brazilian soybean crop and fears over fertilizer shortages, is expected to help drive grain and oilseed markets higher, with soybeans setting new contract highs.

The new Iranian leader, in his first public statement, declared that revenge is the top priority, that the Strait of Hormuz will remain closed, that all U.S. bases in the region should be closed immediately or be attacked, and suggested that they are ready to use new methods of attack.

President Trump responded by suggesting that the priority must be "stopping an evil Empire, Iran, from having Nuclear Weapons." Starting the post by reminding everyone that the U.S. is "the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money."

The trade has obviously taken that as a sign that the Trump administration is now willing to push on regardless of how high energy prices go. And Iran has made their position very clear.

With that, energy and ag markets are sharply higher, stocks and bonds are sharply lower on the inflationary impact, and the U.S. dollar has extended its rally off the 100-day moving average (on higher interest rates). Interestingly enough, the market's expectation for the next quarter-point rate cut has been pushed back now until the December meeting from the September meeting previously.

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