Effect of Strengthening US Dollar on Commodities Many commodities are prices in US dollars. If the Dollar strengthens, then commodities (in non-US countries) will become more expensive. From the consumers' (suppliers') point of view, this should be a move along the demand (supply) curve, not a shift since nothing has inherently changed in their demand or supply of the actual commodity. For a stronger dollar, a consumer will simply demand less. 

Then why is it that a strong US dollars is highly correlated with low commodity prices? Is the efficient market adjusting to pre- strong dollar levels?
Most global commodities are quoted (priced) in US dollars. The more valuable a dollar becomes relative to other currencies, all other things equal, the more commodity prices have to fall to equilibrate. Imagine everything was priced in corn and people start to value corn more or the amount of corn falls. Either way, all the prices in terms of corn (e.g. ears per barrel of oil) would have to fall as a result.