Corn futures are 2 to 3 cents lower as traders shed risk due to fiscal cliff concerns.
- Traders are taking a cautious approach in the last trading hours of the year, with speculative fund money moving to the sidelines as they wait to see if Congress reaches an agreement on the fiscal cliff talks.
- The U.S. dollar index is choppy this morning, but is currently near session lows.
- Technically, bears hold the near-term advantage. Corn futures must hold support at last week's lows to avoid the risk of triggering sell stops in the thin, holiday trade.
Soybean futures are mostly 10 to 15 cents lower amid profit-taking and favorable weather in Brazil.
- Concerns about the U.S. economy if it falls over the fiscal cliff are weighing on soybean futures this morning. Traders are shedding risk as they close their books for the year.
- Additional pressure is coming from ongoing favorable weather conditions in Brazil, as more rains in the forecast this week will boost the crop.
- Traders are ignoring news that an unknown destination purchased 140,000 MT of U.S. soybean for 2012-13. Traders generally attribute unknown bean buys to China, but last week's sales report showed changes in destinations from unknown to Germany, Indonesia and Vietnam.
- January soybean futures moved above Friday's high earlier, but are now below support at last week's low.
Wheat futures are mostly 7 to 9 cents lower on spillover from neighboring markets and concerns about the U.S. economy.
- Without fresh demand news for the market to digest, wheat is being led lower by spillover from neighboring markets and end-of-the-year position squaring.
- Russia's grain harvest came in at 70.4 MMT, down slightly from the ag ministry's previous forecast of 71 MMT.
- Traders are also awaiting results from Iraq's wheat tender.
- Bears hold the near-term technical advantage, although futures are holding above support at last week's low.
Live cattle futures are called steady to lower on spillover from negative outside markets.
- Traders will be focused on even positions on this last trading day of the year and watching outside markets for direction. Concerns about the U.S. economy falling over the "fiscal cliff" are expected to weigh on the U.S. stock market today.
- December live cattle futures could face some profit-taking on its last trading day (expires at noon CT) as the contract holds more than a $2 premium to last week's $127 cash trade.
- Traders will also be keeping a close eye on the boxed beef market to start the week as it will provide clues to this week's cash tone.
Lean hog futures are called to open lower in reaction to Friday's bearish Hogs & Pigs Report.
- Traders looking for Friday's Hogs & Pigs Report to show contraction in the pork industry were disappointed as most categories came in near year-ago levels. The report points to at least steady pork production in 2013 compared to this year.
- Meanwhile, the cash hog market is expected to be mostly steady in light trade, as many plants will work on reduced shifts today and are closed Tuesday.
- Traders will also be working on even positions and they close their books for the year. This could also spur profit-taking given the fact February hogs are trading at around a $4 premium to the cash index.