Corn futures are steady to slightly lower. Higher soybean values are providing underlying support while the market awaits further developments on the demand front. Ethanol production increased last week, but lagging export demand continues to hold prices in check. Conab, a Brazilian government agency, essentially lowered its corn production estimates slightly to 71.9 mmt, down from a midpoint last month at 72.2 mmt. Early estimates suggest the trade is leaning slightly higher for U.S. corn ending stocks in next week’s supply and demand update. In early morning trade, March corn is down 1 1/2 cents at $7.56 1/4.

Soybean futures are a little stronger in early morning trade Thursday. Planting delays in Argentina are a concern, but the Brazilian government’s estimate for soybean production edged a little higher from last month to 82.6 mmt and near the high side of last month’s estimated range from 80.1 to 83 mmt. This is higher than private estimates earlier this week. Expectations of Chinese buying interest are supportive. In early morning trade, March beans are up 4 1/4 at $14.78.

Wheat futures are just a little stronger in early Thursday. Wet weather has hurt the Argentine crop. Wheat is only one third harvested and a significant amount of acreage was reportedly lost altogether due to flooding, and now disease and head sprouting in un-harvested wheat is a growing problem. This supports ideas that lagging U.S. export sales are going to pick up in time to sustain the USDA current export forecast. Trade expectations for next week’s USDA supply and demand update are for ending stocks to edge up only slightly from 704 million last month. In early morning trade, CBOT March is up 2 at $8.62. KCBT March is up 1 1/2 at $9.09 ¼ and MGE March is up 3/4 at $9.33.

Fed cattle are mixed while feeder cattle futures are a little higher in early Thursday morning trade. No cash trade has been reported so far this week. Beef prices were lower on Wednesday. Poor packer margins and a lot of contract cattle may temper bids. Traders are concerned that beef demand could remain weak until retailers begin buying post Christmas needs later this month. In early morning trade, February cattle are down 2 cents at $130.77. January feeders are 40 cents higher at $146.80.

Hog futures are lower in early Thursday trade. The ongoing surge in wholesale pork values seemed set to continue after the USDA reported that ham prices had risen to a fresh 2012 high at 85 cents/pound at midday. Expiring December futures surged to its highest level since early March in response. The market continues expecting a combination of diminishing production and robust demand to support the hog and pork complex in 2013. In early morning trade, February hogs are 65 cents lower at 85.00.

Cotton futures are a little higher in early trade Thursday. Prices are bouncing back after trading lower earlier in the week on concern over the threat of the “fiscal cliff”. It has become a particularly negative factor for cotton futures. The market will take cues from Thursday’s export sales report. In early Thursday trade, March cotton is 30 points higher at 73.34.