May canola is down $3.10/mt, May soybean oil is down .05 cents/pound, May European rapeseed is up 1.75 euro per mt and April Malaysian palm oil is up .85%. May oats are up 3 cents/bushel. April crude oil is up $1.31 per barrel, April ULSD is up $.0617 per gallon, and the March Canadian dollar is up .00245 at .73395. The March U.S. Dollar Index is down .140 at 97.600 and the March Brazilian real is down .00026 at 0.19419.

Minor profit-taking set in for the oilseed complex in early trade despite gains remaining in energy markets. Losses are insignificant so far, but the overnight gains have been given back. The overbought nature of prices suggests a minor pullback would be healthy.

Gains overnight in soybeans may have been in part due to the deterioration of the Argentine soybean crop. It's good-to-excellent rating fell 7% over the past week according to the Buenos Aires Grain Exchange, from 33% to 26%, now matching last year's level. The corn rating also gave up last week's gains with the good-to-excellent rating falling from 51% to 43%. With corn harvest just beginning, the uptick in rainfall expected next week may do more harm than good now.

Corn and wheat are higher with the latter taking out Monday's highs already in Chicago with Kansas up as much as $.14/bushel as well. Managed money trader short-covering is likely driving that level of buying while commodity index traders may also be active buyers as a hedge against inflation (considering Friday's hot PPI data).

Energy markets remain sharply higher with all indications suggesting military action (against Iran) will be hard to avoid now. Increased fighting between Pakistan and Afghanistan may also be providing support.

In outside markets, equities remain under pressure on concerns over AI and a much hotter-than-expected PPI release Friday morning. Despite the surprisingly large increase in inflation, Treasury markets are higher in what appears to be a flight-to-safety (due to Middle East risks rising). Despite that, the U.S. dollar has remained under pressure with it trading near the lows of the day.

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