November canola is up $7.90 per metric ton (mt), December soybean oil is up .81 cents per pound, November European rapeseed is up 3.75 euros per mt and October Malaysian palm oil is closed for holidays. December oats are up 1 1/4 cents per bushel. October crude oil is up $1.12 per barrel, October ULSD is up $.0477 per gallon, and the December Canadian dollar is up .00105 at .72995. The December U.S. Dollar Index is down .450 at 96.450 and the October Brazilian real is up .00060 at 0.18795.

Grain and oilseed markets have firmed throughout the morning, with corn and soybean oil leading the way. Soybean oil traded 1.27 cents per pound higher at one point on rumors that there will soon be a decision on how the EPA will treat the reallocation of small refinery exemptions. The trade obviously was counting on that to be good news to start, but prices have backed well off the highs as calmer heads prevailed. Strong energy prices have likely helped both corn and soybean oil, given their biofuel components, with canola also benefiting. Ongoing attacks by Ukraine on Russian energy infrastructure and talk of increased sanctions against Russian oil continue to inspire buying in energy markets.

As mentioned in the opening comments, buying by commodity index traders should not be underestimated, given the (basically) unanimous opinion that the Fed will begin an interest rate cutting cycle to help a weakening labor market while leaving inflation unchecked. They buy commodities as a hedge against inflation and contributed greatly to the rally from early 2020 to the spring of 2022. They have already been adding to their holdings of ag futures and option positions since Aug. 11. Unusual market strength like that seen Friday following what many felt was a bearish WASDE report and today's moves may be a sign of just such activity. We will know better this Friday when COT data is updated. A bullish NOPA crush report for August is surely helping the soybean complex and, thus, canola. For corn and soybeans, the U.S. dollar breaking down from the 100-day moving average is turning into a tailwind due to the strength in the Brazilian Real. That currency has been breaking out of consolidation this week, reaching levels not seen since June 2024 and making U.S. row crops even more price competitive versus Brazilian sources.

In outside markets, treasuries are mixed ahead of the FOMC interest rate decision to be announced Wednesday, while equity markets have reversed from new record highs on likely profit taking.

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