January canola is up $4.20 per metric ton (mt), March soybean oil is up .25 cents per pound, February European rapeseed is down .25 euro per mt and January Malaysian palm oil is up .47%. March oats are up 3 3/4 cents per bushel. January crude oil is up $.37 per barrel, January ULSD is down $.0135 per gallon, and the December Canadian dollar is up .00195 at .71235. The December U.S. Dollar Index is down .039 at 99.550 and the December Brazilian real is up .00090 at 0.18680.

Grain and oilseed markets are strong going into midday with corn leading the way. There was no fresh news evident to explain the early strength, but a strong weekly ethanol report released midmorning certainly supports the rally. A 22,000 barrel per day (bpd) increase took production up to 1.113 million bpd for the week. With that still being below last year's levels, it may have been the declining inventories that helped more (down 4.1% versus last year). Strong exports and expectations that final corn yields will fall are reported as contributing factors.

Soybeans have taken over as the leader of the oilseed complex, but soybean oil and canola remain higher despite mixed activity in energy markets. Reports suggest up to 15 more cargoes (of soybeans) may have been sold to China on Tuesday but that has not been confirmed yet by flash sales announcements (or other official means). That said, the strength going into midday suggests some believe in the business.

Given the follow-through buying from Tuesday's late-day rally, strength could still be partially due to hedging against inflation now that Kevin Hassett has been reported as the leading candidate for the next Federal Reserve chairman. With his record of being very loyal to President Trump, it is widely expected he would push for lower interest rates regardless of inflation.

In outside markets, Treasuries remain mixed after the gains of the past few days and equities are sharply higher again on the Hassett news. The U.S. dollar is quietly lower on the same influence.

Energy markets are mixed while waiting for developments on the peace proposals despite increased inventories across the board in the weekly EIA inventory report.

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