Diminished concerns about the inflation outlook and increased optimism about economic prospects seemed to support equities and undercut commodities Tuesday morning. Thus, after responding well to the Monday afternoon Crop Progress report in early trading, corn futures had moved generally lower around midsession. July corn had inched up 1.75 cents to $6.3825/bushel late Tuesday morning, while December dropped 5.5 cents to $5.3275.

Tight supplies and firm prices reemerged in conversations about the soy complex Tuesday morning, which seemed to spark modest early CBOT gains. Bulls could also point to the latest statements from Oil World, which argued that global soybean meal supplies will remain tight through June; the slow rate of exports from South America may do little to alleviate the situation in the near future. July soybean futures rose 7.75 cents to $13.78/bushel as the lunch hour loomed Tuesday, while July soyoil gained 0.06 cents to 48.82 cents/pound, and July soybean meal climbed $3.3 to $404.5/ton.

Wheat futures rebounded from their big Monday losses in early Tuesday trading. The weekly USDA Crop Progress report showed the quality of the winter wheat crop had declined once again, while spring wheat plantings remain far behind normal. However, ideas that the situation may not be as bad as previously thought seemed to weigh upon prices later in the morning. July CBOT wheat futures slipped 2.75 cents to $7.00/bushel around midsession Tuesday, while July KCBT wheat slid 4.5 cents to $7.5225, and July MGE futures skidded 2.75 cents to $8.03.

Cattle futures fell Monday in reaction to news that wholesale beef prices had set back from the record high posted last Friday afternoon. Traders are now much less optimistic about short-term cash market prospects, which explains the Tuesday morning weakness. However, that might change if cutout values resume their early-May surge during the days just ahead. June cattle gained 0.07 cents to 121.37 cents/pound late Tuesday morning, while December dropped 0.35 cents to 125.60. August feeder cattle futures tumbled 0.75 cents to 146.70 cents/pound, while November dove 1.10 cents to 150.80.

After following the cattle market lower Monday, lean hog futures were mixed Tuesday morning. Increased pessimism about the outlook for cash hog and wholesale pork values is very likely weighing upon the Chicago market at this juncture, especially with futures already carrying substantial premiums to the CME index. That could change quickly, but their Monday break was not at all encouraging. June hog futures edged up 0.17 cents to 91.50 cents/pound in late Tuesday morning trading, while December futures slid 0.05 cents to 77.55.