Corn prices are 2 to 5 cents lower early Tuesday. Pressure on the corn market is coming in part from spillover selling from the soybean market. The March corn futures is testing chart support at $7.18 and the next level of support is near $6.80. The forecast for a significant winter storm moving through the Midwest later this week bringing snow to the region has contributed to the pressure on prices so far this week. The March contract was recently at $7.19 ½.
Soybean prices are a5 to 20 cents lower early Tuesday morning. Weather conditions are improving in South America growing regions and the prospect for record crops down there is putting pressure on U.S. soybean futures prices. The nearby contract traded above $15 on Monday but has now dropped back to below $14.80. There was some carryover selling following the weak prices before the settling price was established on Monday. The market is still trending up, but developments so far this week are troubling.
Wheat prices are generally 2 to 5 cents lower Tuesday morning. Wheat prices are also being impacted by the sell-off in soybeans. The approaching winter storm that is expected to bring snow to some of the winter wheat growing area is also bearish for wheat prices. After falling by nearly $1 so far in December, the wheat market is technically oversold. That could allow for a modest price bounce ahead of end-of-month, end-of-quarter, end-of-year close-out of positions.
Live cattle and feeder cattle contracts are higher early Tuesday. Live cattle futures prices posted big gains on Monday with the April and June contracts hitting new highs. There is some concern about the winter storms expected over the next several days, which could slow weight gains and disrupt transportation. There has been now activity in the cash market, but sellers have raised their asking prices while packer margins remain very poor. The slaughter pace is expected to be down this week and even lighter next week. But so far the light slaughter levels have not led to any real increase in beef prices.
Lean hog futures are up 20 cents top 40 cents early Tuesday. Cash hog prices fell on Monday, but so did the trade volume. Packers need to buy more hogs and may have to raise bids to get it done. But processing margins are poor and packers may decide to reduce slaughter levels. Retail demand for pork is generally weak through the end of the year but production will be reduced due to the holidays over the next two weeks. The quarterly Hogs and Pigs report will be released December 28 and we could see significant position evening ahead of the report.
Cotton prices are down 20 to 40 points Tuesday morning. Cotton futures are down slightly in early morning trade and a quiet session is expected for the day. The March contract has been surging higher over the past month, with the March contract closing at the highest level since September 20 on Monday. Tuesday is expected to see consolidation near Monday’s settling price. The recent surge in cotton prices reflects good export demand. Prices may continue to improve if we see another good week of export sales.