March canola is up $2.90 per metric ton (mt), March soybean oil is down .14 cents/pound, May European rapeseed is down 3.00 euro per mt and April Malaysian palm oil is down .02%. March oats are up 2 cents/bushel. March crude oil is up $.21 per barrel, March ULSD is up $.0767 per gallon, and the March Canadian dollar is down .00345 at .73895. The March U.S. Dollar Index is up .568 at 96.705 and the February Brazilian real is down .00140 at 0.19120.

Friday's trade has been dominated by month-end position squaring, preparing for a potential military strike against Iran and reacting to the news that Kevin Warsh has been nominated by the president to replace Jerome Powell as the next Fed chair.

The U.S. dollar and precious metals are experiencing the most violent reactions with a sharp rally in the dollar showing confidence in the pick, thereby reducing the need to put money into gold, causing an acceleration lower for the latter. April gold is currently down $322/ounce on the day and almost $600/ounce below Thursday's record high.

Warsh was a former Fed Governor and the most qualified for the post according to all weighing in. That inspires hope that the Fed will maintain its independence and not lower rates unless it is prudent to do so. The prospect of higher for longer (interest rates) not only helped the U.S. dollar (thereby weakening the Canadian dollar), but has also pressured equity prices. A much hotter-than-expected PPI report Friday morning also suggests lowering interest rates could be a challenge (to justify). Despite that, the market is still pricing in another quarter-point Fed Funds rate cut at the June meeting while the U.S. 10-year note remains very steady at 4.25%. That is likely because Warsh is on the record as considering AI as deflationary due to the reduced demand for labor and resulting negative impact on wage inflation. That could give him the cover needed to lower interest rates despite rising inflation in the goods sector. Many suggested that it will be an interesting experiment.

In the meantime, the surge in diesel prices over increased geopolitical risk has combined with the weak Canadian dollar to help canola turn positive on the day with soybean oil cutting its losses. The remainder of the grain and oilseed markets remain under pressure with month-end profit taking likely the greatest factor. A strong U.S. dollar won't be helping either.

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