Corn futures reversed from early highs Tuesday morning. After leaping upward in response to droughty late-summer weather and forecasts for more of the same through early September, corn futures reversed sharply lower late Tuesday morning. Wire service reports cited profit-taking for the drop, but traders may also have decided that recent grains have fully anticipated the bullish impact of the summer heat. September corn dove 7.75 cents to $4.8725/bushel around midsession Tuesday, while December fell 9.25 cents to $4.7275.

The soy complex gave back major portions of early week gains. Anticipation of drought damage to the ongoing soybean crop almost surely powered the Monday night-Tuesday morning soy surge, with prices seemingly likely to follow through to the upside. However, the CBOT markets gave back major portions of those gains as the morning passed, although there were no obvious reasons for the reversal. Traders seemingly felt that recent gains had already incorporated the bullish weather into Chicago prices. The shift raises questions about the technical outlook. September soybeans jumped 12.25 cents to $14.3625/bushel late Tuesday morning, while November beans surged 27.25 to $13.8475. September soyoil climbed 0.16 cents to 44.05 cents/pound, and September soymeal climbed $15.7 to $483.9/ton.

After rallying in concert earlier, wheat futures turned downward along with corn by late morning. As with corn, there was little supportive news concerning the wheat market Monday night. That probably made the early wheat rally possible. Conversely, wheat also proved vulnerable to the late-morning sell-off, which in turn may set the stage for larger short-term losses. September CBOT wheat dropped 7.5 cents to $6.3575/bushel in late Tuesday morning action, while September KCBT wheat sank 5.75 cents to $6.95, while September MGE futures sagged 5.5 cents to $7.1475.

Seasonal optimism may be boosting cattle futures. Although cash and wholesale prices dipped last week, cattle futures had rallied modestly Tuesday morning. Ultimately, the cattle production and marketing industries tend to make a fresh start after Labor Day, with firm late-summer demand being met by seasonally declining production. As a result, the modest Tuesday-morning rise was not terribly surprising. October cattle futures rose 0.37 cents to 127.17 cents/pound just before the lunch hour Tuesday, and December edged up 0.22 cents to 130.70. September feeder cattle futures bounced 1.17 cents to 158.10 cents/pound on the corn drop, while November surged 0.55 to 160.27.

Hog traders seemed cautiously optimistic about short-term price prospects. Although recent production shortfalls and seasonal patterns seemingly point to firming cash and pork prices later this month, last Friday’s large cash and wholesale losses were not encouraging. October hog futures advanced 0.20 cents to 87.82 cents/pound around midday Tuesday, while December inched up 0.12 cents to 84.82.