Soybean futures sharply extended their price pullback as rains fell on Argentina and southern Brazil. With South American weather improving, funds moved to a net short position. To protect against a further near-term price decline, we hedged a portion of 2017-crop on Dec. 20. Corn and wheat futures were boosted by corrective buying this week. In addition to short-covering, corn futures were supported by long-soybean/short-corn spread unwinding. Fundamental support for both corn and wheat came from a strong pickup in export sales, signaling prices got low enough to encourage some value buying.
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Cattle futures dropped this week despite steady to firmer cash cattle trade, as traders are reluctant to push futures above the cash market. Lean hog futures maintained their sizable premium to the cash index, signaling traders anticipate a near-term recovery in cash hog prices.
Trump signs major tax reform bill
President Donald Trump on Friday signed Republicans’ massive $1.5 trillion tax overhaul into law, his first major legislative “win” of his presidency. See News page 3 for details and analysis.