November canola is down $10.10/mt, December soybean oil is down 1.30 cents/pound, November European rapeseed is up 1.75 euro/mt and October Malaysian palm oil is down 0.24%. December oats are down 1/2 cents/bushel while November European corn is up .75 euros/mt. September crude oil is up $5.53/barrel, September ULSD is up $.2025/gallon, and the September Canadian dollar is up 0.00080 at 0.71130. The September U.S. Dollar Index is up 0.019 at 101.285 and the August Brazilian real is down 0.00030 at 0.19480.

A tale of two opposing influences is driving price action again Wednesday morning with energy markets sharply higher this time while most grain and oilseed markets are adding to overnight losses in early trading.

Besides President Trump confirming that the U.S. will "be hitting them hard" and that "There're going to get a beating" referring to Iran in response to the surprise missile attack on Jordon late Tuesday, a very concerning weekly energy inventory report is supporting sharply higher prices. In fact, crude oil was up over $6/barrel at one point on news from the EIA that commercial crude oil stocks (excluding the SPR) fell by 7.2 million barrels on the week while the trade was only expecting a 600,000-barrel decline. To make matters worse, the SPR levels fell another 3.8 million barrels to 307.7 million barrels. That is approaching minimum safe storage levels and the lowest since early March 1983. To add to concerns, Cushing, Oklahoma (the delivery location for NYMEX crude oil futures) stocks fell to 18.6 million barrels with anything below 20 million barrels considered problematic for trying to draw from tank bottoms.

Meanwhile, Chicago ag markets are ignoring the support a jump in energy prices might have and remain focused on forecasts for beneficial rainfall throughout the Corn Belt to end the week. The breakaway gap in corn remains safely below the current price while the soybean gap has now been filled, negating its importance. Interestingly enough, European rapeseed and corn are ignoring Chicago markets and are trading higher on the day.

Outside markets are responding to the higher energy prices as one would expect, with both stocks and bonds lower and the former down sharply. Meanwhile the U.S. dollar has only managed slight gains on the higher interest rates.

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