May canola is up $7.90/mt, May soybean oil is up .04 cents/pound, August European rapeseed is up 3.50 euro per mt and June Malaysian palm oil is down .55%. May oats are up 10 3/4 cents/bushel. May crude oil is up $6.46 per barrel, May ULSD is up $.2417 per gallon, and the June Canadian dollar is up .00095 at .72615. The June U.S. Dollar Index is up .126 at 98.565 and the May Brazilian real is down .00035 at 0.19835.

Markets in general walked back initial overnight reactions to the failure of talks over the weekend and the U.S. blockade of Iran ports and coastal areas in early trading, filling gaps that had been left in many markets. A gap higher in Kansas wheat (due largely to concerns over dryness) and May gasoline futures were the remaining exceptions with those gaps remaining. That said, following the initial optimism that the escalation would be walked back quickly, it does not appear to be the case and energy markets are on the rise again. With Iran claiming its military is on "maximum combat alert" level and ready to strike against any military intervention in the Strait of Hormuz, it should be very clear that insurance providers will want nothing to do with what is now looking like a potential battle zone (the Strait of Hormuz).

In what may be a first, there seems to be a separation between paths of intense nitrogen application crops like corn, wheat and canola and nitrogen-fixing crops like soybeans. Concerns over seasonal supplies of fertilizer is likely contributing to gains in the former three while anxiety over escalating tensions with China and the lack of nitrogen needed for soybean production weighs on the latter (soybeans).

In outside markets, after rallying to fill gaps down, both Treasuries and equities are starting to drift lower again on the impact that the escalation will likely have on inflation. With that, the U.S. dollar is firming again after pulling back in early trade.

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