I would definately not be lunging yet. I usually wait until 3 to start lunging as I don't want to damage joints. Its never too early to desensitize though. I would be getting him used to getting on the trailer, plastic bags, tarps, cars, etc. This will make your job much easier when the time comes to saddle break. I would also work on giving to pressure, yeilding shoulders and hindend, etc.
It is a good idea to keep the sessions very short though as at that age their attention span is limited. I would say one or two 10 min sessions a day at the most would be good.
Remember to let him be a horse- they learn valuable lessons by being in a herd. A lead mare would never tolerate biting or kicking and will quickly put him in his place. You need to be the lead mare as well- this is an important time in his development, and he needs to understand that nipping and kicking is not acceptable. Be firm, but fair.
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