May canola is up $5.40/mt, May soybean oil is up .60 cents/pound, May European rapeseed is down 1.75 euro per mt and April Malaysian palm oil is up 1.51%. May oats are up 4 3/4 cents/bushel. April crude oil is up $2.37 per barrel, April ULSD is up $.2507 per gallon, and the June Canadian dollar is down .00025 at .73275. The June U.S. Dollar Index is up .235 at 99.565 and the April Brazilian real is down .00005 at 0.19165.

Overnight losses in grain and oilseed markets were reversed in early trading following Israel's attack on Iranian gas fields, with Iran quickly vowing revenge. All sides have so far tried to avoid energy infrastructure for the most part, targeting storage facilities instead. With this escalation, Iran has warned that it will attack locations in Saudi Arabia, the UAE and Qatar, going as far as issuing evacuation orders for those facilities (which are currently being evacuated).

Energy markets rallied sharply on the developments with diesel leading the way, up over $.28/gallon at one point. Crude oil tried to test $100/barrel again after being as low as $91.96/barrel overnight. With that, corn and soybean oil have led the way higher with the balance of grain and oilseed markets following suit. It's worth noting the change in psychology was enough to let the bullish weather developments impacting the U.S. Southern Plains to take hold, with Kansas wheat $.20/bushel higher now.

Besides the developments in the energy sector, a much hotter-than-expected PPI report may have inspired additional commodity index trader buying as a hedge against inflation (with corn and wheat being prime candidates). Core PPI hit 3.9% versus expectations of 3.7%. The troubling part is "core" means it is excluding volatile food and energy components, with those surely to jump in future reports on the fallout from the Middle East conflict. Headline PPI was also hotter than expected at 3.5% compared to estimates of 3.0%.

With that, Treasury markets fell with interest rates turning higher, equities reversed sharply lower and the U.S. dollar jumped on a flight-to-safety bid as well as higher interest rates. As a side note, the Bank of Canada left their lending rate unchanged at 2.25%, as expected.

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