CBOT futures closed sharply lower and near the day’s lows.  Trade volume was light due to the holiday-shortened week.  Outside market influence was mixed with higher energy prices offset by weaker equities. Corn and wheat exports remain disappointing and ethanol producers face negative margins.

A potential longshoremen strike at ports in the Pacific North West may have weighed on the market as this could reduce US grain exports.

Live Cattle futures edged higher on optimism for rising fed cattle prices into 2013. The winter storm and very low temperatures across the central Plains should limit weight gains. Feeder futures had strong closes given the lower corn futures.

Lean Hog futures continued the Friday/Monday price rally through today’s morning hours, but sold off at the end of the day. Technically, this is a bearish hook reversal (higher open, higher high than previous day, lower close). February traded within 45 cents of major chart resistance.  The winter storm that swept across the Plains and Corn Belt has been supportive.

The Quarterly Hogs and Pigs report comes out Friday afternoon. Traders expect the breeding herd at 99.3 pct of a year ago and market hogs at 99.1 pct.

The “fiscal cliff” situation has not improved with no apparent discussions between the political players today.  Treasury Secretary Geithner warned Congress today that the U.S. hits the debt ceiling on Monday, December 31.  The Treasury can take extraordinary measures to extend debt default by up to two months.

Energy prices shot higher on increased geo-political risk in the Persian Gulf. Corn Mar -11 693 (692-706); Jly -9.5 694; Dec -8 599

Bean Jan -15 1424.5 (1421-1447); Jly -17.5 1404; Nov -9.5 1300 (low 1295) Meal Jan -3.5 431;  Oct unch 373 Oil -65 4829

Wheat Mar -19 774; Jly -19 791.5 (791-811) KC -20 824; MGE -12 869

LC Dec +17 12935; Feb +55 13377; Oct -2 13507 FC Jan +57 15207; Apr +87 15685; Aug +70 16250

LH Feb -10 8745; Apr -17 9147; Jly -40 9987

Milk Jan -29 1808; Feb -10 1835

Oats -5 360

Rice -19.5 1515

US$ -.1%

Dow -25 13116 SP -7 1420 NAS -22 2990 Tran -32 5288

VIX +.89 19.48 4.8%

WTI +249 9110 Brent +238 11118 Gas +6.5 281.6 NG +.5 335 HO +4 304.5 Eth -2 221

Gold unch 1660 Slvr +16 3006

2-yr -.012 0.277% 5-yr -.016 0.762% 10yr -.021 1.753% 30yr -.007 2.922%