Periodic Updates on the Futures Markets

March canola is down $3.30 per metric ton (mt), March soybean oil is down .66 cents/pound, May European rapeseed is up 1.75 euro per mt and April Malaysian palm oil is closed. March oats are down 12 1/4 cents/bushel. March crude oil is down $3.21 per barrel, March ULSD is down $.1640 per gallon, and the March Canadian dollar is down .00520 at .73210. The March U.S. Dollar Index is up .586 at 97.445 and the February Brazilian real is down .00015 at 0.18910.

Not much has improved in the commodity world since the opening comments. In fact, energy products have weakened further while precious metals have given up their early recovery gains, now down on the day.

The energy selloff is primarily due to expectations that talks between the U.S. and Iran will prevent an attack on the latter. With last week’s extreme cold weather now in the rearview mirror, heating oil and natural gas markets are sharply lower as well. The extreme moves are not over with the March natural gas contract losing over 21% of it’s value today alone. These kind of violent moves in commodities is hard on the overall psychology of being long, regardless of the market in question.

All of that said, the losses in the Canadian dollar have helped canola minimize the price damage relatively speaking. Soybean oil is the weak member of the soy complex with both soybeans and corn both remaining lower. Wheat losses have increased as the morning has progressed with the U.S. dollar near its high of the session likely playing a role. It is worth noting that the dollar rally successfully filled the gap lower that remained from Sunday, Jan. 25.

In financial markets, Treasuries have given up overnight gains and have turned relatively weak while equities fully recovered and are now higher on the day.