Grain markets were generally quiet for the week, with both wheat and corn chopping sideways in a narrow range.
World cash wheat prices were little changed as well; Russian offers appear to be stabilizing as they head into the winter months. Export demand has picked up with Egypt, Saudi Arabia, Algeria, Iraq, Jordan and Ethiopia all making major purchases over the last week.
Corn values were flat as the US harvest winds down and farmer selling shuts off. Cash values for corn have improved despite the weakness in the futures market, suggesting strong end user demand. Soybeans were higher on big export sales to China and on nervousness about drying conditions in key production areas of Brazil and Argentina. With a La Nina event becoming official, the market is bracing for potential longer term dry conditions to develop across much of Argentina and southern Brazil during their growing seasons.
The cattle complex was sharply lower as both live cattle and feeders broke below key support levels. With the increasing herd size, showlists are quickly increasing as well, putting pressure on cash markets. Packer demand for holiday beef purchases appears to be over, and short kill weeks during Christmas and New Years will keep packer interest subdued until January.
For feeders, we still see good demand for lighter weight calves, particularly for farmer/feeders now that corn harvest is over, and they can concentrate on filling pens. Corn is cheap, as are most feedgrains, further encouraging feeding livestock instead of just selling the grain for cash.
Crude oil found some support on a bigger drawdown in stocks than the market expected. That drawdown led to higher supplies of distillate products than expected, putting pressure on those markets.
Precious metals saw more selling pressure as there is just little inflation evidence, and investors are becoming more confident in stocks now that a tax reform bill gets closer to becoming a reality.
The stronger economic outlook was certainly evident in the Dow, which soared to another all-time high, and in the US dollar which managed to continue its rally off of the late November lows.