As one would expect, Monday morning commodity market activity was quite subdued in pre-Christmas trading. Numerous markets closed at noon. Still, it was rather impressive to see the grain and soy complexes post modest gains in the wake of their losses to the middle of last week. Traders are reportedly anticipating improved demand for the various U.S. products, because their prices have fallen to their lowest levels since early summer. Corn certainly seems much more attractive at this point. Still, one has to wonder how well the grain and soy markets will behave today, since dock workers across much of the land rejected a new contract offer from shippers late on Christmas Eve. March corn rose 2 1/4 cents to $7.04 1/4 and December inched 1/4 cent higher to $6.07/bushel Monday.

Wire service reports suggested that bargain hunting by bulls in the belief that mid-December losses were large enough to attract fresh export interest, thereby boosting soybean prices on Christmas Eve. If so, they may face an uphill battle, since recent weather has favored a large South American bean crop. Moreover, Chinese buying seems likely to be subdued for a while after they cancelled two large sets of previously contracted shipments last week. The recent bounce in U.S. dollar values may also hamper such efforts, because a greenback rise against other currencies makes American products more expensive to export customers. January beans advanced 9.0 cents to $14.39 3/4 Monday, while January soybean oil climbed 0.23 cents to 48.94 cents/pound and January meal edged $1.0 higher to $434.8/ton.

Concerns that persistent dryness across the Southern Plains will limit the winter wheat crop apparently supported wheat futures Monday. Bulls may also have been reacting to news that Argentine officials had cut their estimate of the forthcoming wheat crop by 5%, although the official figure is still above those being posted by private forecasters. The fact that large speculators had boosted their short holdings to their highest level since May could also affect the wheat market, since a bullish bounce might be exaggerated as they bail out of those positions. March CBOT wheat rose 1 3/4 cents to $7.93 3/4 during the abbreviated session and March KCBT wheat gained 2 1/2 cents to $8.44 1/2, but March MGE futures slipped 1/4 cent to $8.81 1/4 per bushel.

As expected, the December 21 USDA Cattle on Feed report weighed upon live cattle futures Monday, since both the placement and marketing results for November disappointed many on the bullish side of the market. Conversely, forecasts for another major winter storm over large portions of the country may have limited the potential losses. That is, feedlot cattle don’t do well in wintry conditions, especially if they’re not already acclimated to the cold. Forthcoming price action may ultimately depend upon the direction taken by the wholesale market; the latter has proven generally flat to weak for weeks. February live cattle futures slipped 0.35 cents to 133.35 cents/pound Monday, while the April contract fell 0.50 cents to 136.82.

Hog futures again performed relatively well Monday, with much of the optimism in the pit resulting from ideas that grocers will feature pork quite aggressively in January. The fact that wholesale prices weren’t updated by the USDA may actually have supported the market as well, since seasonal weakness due to diving ham prices was probably to be expected. Whatever the cause, the strong close seems likely to prompt a quick test of stubborn chart resistance in the 88.00-88.25 cent/pound range during the days ahead. February hogs rose surged 0.65 cents lower to 87.55 cents/pound on Christmas Eve, while its June counterpart edged 0.10 higher to 100.75.

Friday afternoon news that non-commercial dealers had boosted their long holdings to the higher in over a year reportedly sparked fresh buying in cotton futures Monday. The optimism is largely based upon the strength of recent export reports, especially those implying active buying from China. The fact that nearby futures have pushed to three-month highs is probably exciting bullish interest as well. March cotton climbed 0.22 cents to 76.40 cents/pound Monday and gained another 0.14 cents to 76.54 in early-morning trading. December inched 0.15 cents higher to 78.30 just before Christmas and was unchanged in Wednesday morning trading.