November canola is down $1.10/mt, December soybean oil is down 1.19 cents/pound, November European rapeseed is down 5.00 euro/mt and November Malaysian palm oil is down .33%. December oats are up 8 3/4 cents/bushel while November European corn is up .25 euros/mt. October crude oil is down $1.21/barrel, October ULSD is down $.2016/gallon, and the December Canadian dollar is down .00005 at .71770. The December U.S. Dollar Index is down .009 at 99.970, and the December Brazilian real is up .00040 at 0.19355.

It appears that the increase in the overnight Fed Funds rate Wednesday (for the first time since 2023) and the hawkish tone of the press conference to follow may have inspired further fund liquidation as commodity index traders are (likely) taking profits on more of their long hedges against inflation. Not only did Fed chairman Kevin Warsh leave the market pricing in three more quarter-point rate hikes by the end of the April Fed meeting by his hawkish rhetoric, he actually singled out the need to make sure grain and oilseed prices don't rise further. He suggested that one of the three indicators that the Fed is monitoring to make sure that there are no secondary inflationary impacts of rising energy prices is "the difference between spot prices for corn, soybeans, wheat and so-called crack spreads" over time. Nothing like putting a bullseye on a market that you don't want to see go higher. Not that a few quarter-point increases in the Fed Funds rate will impact global supply and demand factors in the long run, but the statement likely provides a psychological headwind in the short term. And with that, overnight gains have been lost with corn, soybeans, wheat and energy crack spreads now all under pressure.

The pullback in diesel prices from record highs on (likely) profit taking continues to weigh most heavily on soybean oil but also somewhat on canola. Continued strength in soybean meal and the related selling of soybean oil as a spread following Tuesday's NOPA crush report has not helped matters either.

With the pullback in energy prices, stocks are sharply higher while treasury values have added to overnight gains with both markets celebrating the tough talk on inflation. The lower interest rate that resulted has weighed on the U.S. dollar.

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