In the News

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WEEKLY COMMODITY HIGHLIGHTS

Nearby Futures	Weekly Change	Friday's Close	Year Ago
Corn	-0.0325	3.5625	3.6975
Soybeans	-0.0075	10.3675	8.6250
Wheat	-0.0700	4.0925	4.8350
Cattle	+3.61	112.33	119.97
Hogs	+3.15	64.70	57.90
Cotton	+0.24	71.04	63.25
Milk	+0.23	17.33	14.53
Crude Oil	+0.40	51.90	35.52

Grain and soybean prices were down on the week as choppy, sideways trade persisted. Worries about hot and dry conditions in southern Argentina helped underpin the complex, although rains expected in the second half of December are likely to provide relief. Strong export demand is another supportive factor, and weekly soybean export commitments were well above expectations. With Brazil conditions favorable and the crop running at or ahead of schedule, the question is when demand shifts to South America, and to what extent there are U.S. export cancellations. The longer-term fundamentals for soybeans remain negative due to the South America outlook and expectations of a big jump in U.S. soy acres in 2017. The wheat market remained under pressure from abundant world supplies, which overshadowed minor concerns about winterkill in the U.S. Plains. Cotton futures were up slightly on the week but remain stuck in a sideways pattern. Crude oil futures were up on the week, due mainly to gains on Monday on news that non-OPEC oil producers planned to join OPEC in cutting output. A surging U.S. dollar was a headwind for commodities generally. The dollar index hit a 14-year high on the Fed's interest rate hike and comments indicating more hikes in 2017.

In the livestock complex, both live cattle and lean hog futures surged. Live cattle were propelled by strong beef prices, which bolstered packer margins and cash trade expectations. Cash did trade higher on the week at $112 in the southern Plains, up $2. The continued strength in the stock market added some psychological support, and bitter cold in the Midwest was also supportive for the livestock complex. Lean hog futures soared to five-month highs on further strength in the cash market. Wholesale pork values were also strong.

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