July canola is down $9.10/mt with November canola down $10.90/mt, July soybean oil is down 2.22 cents/pound, August European rapeseed is down 7.25 euro per mt and August Malaysian palm oil is down .02%. July oats are up 6 1/2 cents/bushel. July crude oil is down $2.19 per barrel, July ULSD is down $.1161 per gallon, and the September Canadian dollar is down .00380 at .70960. The September U.S. Dollar Index is up .598 at 100.455 and the July Brazilian real is down .00315 at 0.19295.

Grain and oilseed markets extended their overnight declines in early trading, led by soybean oil which was led by sharply lower energy markets. The latter has been pressured by traders reacting to the positive rhetoric (regarding the MOU) while ignoring the inconvenient truths. They appear to be targeting the gap higher that was left on daily, weekly and monthly crude oil charts when the war began over the weekend at the start of March. The crude oil gap (on continuation charts) is from $67.83/barrel to $69.20/barrel so a move down below $67.83 would be required to fill the gap (or $5/barrel below Thursday morning's low).

In the meantime, Saudi Arabia has already pushed back against the notion of Iran and Oman managing the Strait of Hormuz and collecting a fee for their efforts while reports indicate ship owners and insurers aren't convinced passage is safe yet, in any significant numbers anyway. Yet part of President Trump's reasoning for agreeing to Iran's terms was that "we were set to run out of oil reserves in 4 weeks" had the Strait of Hormuz not been opened. Given expectations that it will take longer than that to return to anything close to normal, a sell-the-rumor, buy-the-fact type of reaction may yet play out. Potentially leaving the gap unfilled with a rally off it instead, something that would be a bullish technical sign.

The resulting selloff seen in soybean oil has accomplished just what I was warning against in Wednesday's blog at https://www.dtnpf.com/… with the premium for soybean oil over palm oil breaking to just $420 USD/mt Thursday morning after reaching a reaction high of $668 USD/mt as recently as June 1. If that continues, it may attract further export interest in soybean oil despite the lack of available supply. Suggesting the current selloff should be brief and well supported.

Outside markets have generally moved little since overnight reactions to the first FOMC meeting with Kevin Warsh as chair. Stocks have strengthened further, now sharply higher on the day while bonds have all turned positive. The U.S. dollar remains sharply higher on the hawkish tone from Warsh at his first press conference.

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