The corn market is quiet early Tuesday morning. Corn futures traded in about a 2 cent range overnight and a light trade activity is expected. It does not appear that we will see another big gain in the stock market which contributed to the corn price rally on Monday. December futures prices have been trading mostly sideways for the last month, moving between $7.50 and $7.20 per bushel. Unless we get some surprising developments, corn prices are expected to stay near those levels through the rest of the holiday week.
Soybean prices were a little lower early Tuesday morning. Weather forecasts show rain coming to some of the dry areas of Brazil which will boost production potential. The soybean market is considered to be oversold, which could mean a sharp correction if traders get some kind of bullish signal. Export shipments remain very strong and if the current pace continues, we would reach USDA's export forecast by the end of March. However, export levels beyond March will depend on the availability of supplies from South America.
Wheat prices are mixed in early Tuesday trading. The key factor for the wheat market is the very poor condition of the winter wheat crop. The weekly update shows the condition of the crop in mid-November is the poorest on record. Monday's report was the last update of the fall, so we won't get any more information about the condition of the crop until early next year. The weak export demand is keeping some downward pressure on wheat prices.
Live cattle futures are trading a little higher early Tuesday. There have been no developments in the cash cattle market and not much is expected to happen on Tuesday. However, the show lists are smaller than they were last week, especially in Texas and Nebraska. The strong gains in the stock market on Monday were positive for livestock futures, but it doesn't look like the rally will continue into Tuesday. Trade volume will be light Tuesday and for the rest of the week. Developments on Monday were technically positive with the December contract breaking above the recent trading range. Feeder cattle futures were 20 to 50 cents lower early Tuesday.
Lean hog futures are trading 5 to 15 cents higher Tuesday morning. There is a little carryover buying following the gains on Monday. However, cash hog prices are moving in the other direction, down $1.65 on Monday. That widens the gap between cash prices and the December contract to nearly $9.50 per cwt. Packers may have to raise bids to convince producers to move hogs late this week. Hog slaughter often peaks after Thanksgiving so getting a big rally in cash hog prices by the time the December contract expires may be difficult.
Cotton prices are trading 10 to 20 points higher early Tuesday. Cotton prices moved mostly lower on Monday in contrast to gains for most other commodities. The trend in the March contract is up, with prices gaining 2 cents since November 8. However, cotton demand remains pretty weak and we won't get any significant news about the supply side for the next few months. That will make it difficult to force cotton prices significantly higher.