In the News

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WEEKLY COMMODITY HIGHLIGHTS

Nearby Futures	Weekly Change	Friday's Close	Year Ago
Corn	-0.1700	3.6525	3.6225
Soybeans	-0.1075	9.8525	11.1150
Wheat	-0.2050	4.9475	4.2175
Cattle	+3.02	117.80	112.725
Hogs	+0.88	92.60	80.30
Cotton	+0.64	67.18	73.82
Milk	+0.04	15.62	15.34
Crude Oil	+2.31	46.54	45.68

Grain and soybean futures were down on the week, sinking on technical selling, waning concern about U.S. crops and a negative monthly USDA supply and demand report. The action was a reminder that weather markets are difficult and almost always end abruptly, although there is still plenty of “weather” left to trade this season. What looked like a very threatening situation at the start of the week looked less threatening as the week wore on as predictions of a major high-pressure ridge for the July 17-22 time period faded. Still, crops in the Dakotas and northwest Iowa have received too little rain for weeks, and the southwest Corn Belt is also in the grip of hot, dry weather. Conditions across the rest of the Midwest seem generally favorable, although variable. Speculative fund-selling was a major factor across the grains complex. The USDA reported increased domestic corn carryout, and its wheat supply estimates were also greater than expected. USDA's soybean carryout estimate was actually less than expected, and the market's negative reaction Wednesday to what was a friendly report was a bad sign. Cotton futures ended the week poorly and near their June lows, while rice futures also retreated. Crude oil ended higher each day of the week.

In the livestock complex, while nearby lean hog futures were higher, other contracts fell by more than $3 on the week, pressured by seasonal expectations of a decline in cash prices along with soft wholesale pork values. Although the action feeds the idea the market has set a top, exceptionally strong demand for pork, especially bacon, remains fundamentally supportive. Live and feeder cattle futures both exploded to the upside at mid-week, with fed cattle boosted by stronger Plains cash trade. The complex rallied despite another week of significant losses in wholesale beef prices. Packer margins, while still strong, have eroded due to higher cash trade and the decline in beef.

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