Corn prices are expected to open 3 to 5 cents higher. Corn prices were higher overnight but the gains were modest. Corn futures sold off sharply late in the day on Monday, so even the modest overnight increase is encouraging. Traders are already closing out positions ahead of the key USDA reports that will be released Friday morning. The last few quarterly Grain Stocks reports have caused dramatic price reactions. This position evening could keep pressure on corn prices over the next few days.
Soybean prices are expected to open 3 to 5 cents higher on Tuesday. Prices posted solid gains on Monday as concerns that crops in Brazil and Argentina may be smaller than previously estimated. Some traders contend that the market is overbought but more bullish fundamentals appear to be in control, at least for the moment. However, position evening ahead of Friday's reports may limit upside moves between now and Thursday.
Wheat prices are expected to open steady to a little higher on Tuesday. Some weakness in the value of the dollar overnight was helping to support wheat prices. Concern about a possible freeze in winter wheat territory drove wheat prices up early on Monday, but prices closed well below the day's highs. Traders' attention is now focusing on new crop production prospects and traders will be watching weather forecasts closely. So far the 2012 crop seems to be in better shape than the crop was at this time last year.
Live cattle futures are expected to open steady to 30 cents lower on Tuesday. There is still little activity in the cash market, with a wide gap between offers and asking prices. Processing margins remain poor and packers are reluctant to pay more for cattle. Cash cattle prices are already well above nearby futures, and that is providing some support in the futures market. Feeder cattle prices were a little higher in overnight trade.
Hog prices will probably open steady 40 cents lower. The pork cutout value ticked up on Monday, breaking a string of eight days of declines, but the increase was only 15 cents per cwt. Cash hog prices continued to fall with the live weight price dipping below the $60 per cwt mark for the first time since the first week in January. There is concern that pork prices may weaken further now that buying for the upcoming Easter holiday is winding down. USDA will update the hogs and pigs inventory after the market closes on Friday. A modest increase in the number of market hogs is expected in the report.
Cotton prices are expected to open higher on Tuesday. The cotton market is rising as traders focus on the 2012 growing season. There is concern that insect pressure will be worse than "normal this year because of the mild winter. Some traders are worried that cotton acreage will decline significantly, both due to price relationships with other crops and the wet soil conditions in some of the key growing areas in the Delta. Winds are also causing soil to lose moisture in west Texas. A shortage of cotton is unlikely, but the concerns about potential production are enough to give the market a little boost.