Corn futures are expected to open mostly steady on Thursday. Corn futures prices were mixed overnight with small gains for nearby contracts but declines in the deferreds. Trade volume remains light with a lot of traders off for the week. Some rain is in the forecast for Southern Brazil which may remove one source of support that has helped fuel a modest price rally this week. The March contract is testing resistance near the $6.45 level.

Soybean futures prices are called 4 cents to 5 cents lower on Thursday. Improving forecasts for rain in Southern Brazil for this weekend are putting some pressure on the soybean market in overnight trade. There is also pressure from outside markets with the stock market down on Wednesday. The March contract tested overhead resistance on Wednesday but failed to break through.

Wheat prices are called 3 cents to 5 cents lower at the open on Thursday. There is little new news to provide price direction to the wheat market. Fundamentals are generally bearish and the March contract is testing resistance at about $6.60 per bushel. The recent strength in the value of the dollar has traders worried about future exports. But wheat futures prices have been trending up since mid-December.

Cattle futures are expected to open mixed on Thursday. Cattle traders are waiting for some news from the cash market. So far the gap between bids and asking prices remains very wide but some buyers need to buy cattle soon which could force them to raise bids. Cutout values posted big gains on Wednesday which may give buyers a little more room to pay more for fed cattle but relative futures prices give cattle feeders little incentive to try to hold off on sales. The strengthening dollar may cause some problems for beef exports early in 2012.

Lean hog futures are expected to open a little lower on Thursday. Cash hog prices continue to work slowly lower, and they are now down about $5 per cwt since the middle of the month. The weakening cash prices are putting pressure on futures prices as well. The recent strength in the dollar is also a concern since exports are such an important part of demand. Hog weights are rising. Last week they were up 1.4 pounds from a year earlier. A hefty slaughter schedule is expected for Saturday, but it looks like plants have their needs covered well into next week.

Cotton prices are expected to open about 40 to 50 points higher.  Cotton prices posted big gains on Wednesday turning most technical signals positive. The March contract broke through the downtrend and closed at the highest level since December 8. There was no new news to trigger the big increase in prices and in fact the strengthening dollar and concerns about the outlook for the overall economy were generally negative.