Corn futures reacted strongly to the latest Crop Progress report overnight. Although the stated two-percentage point drop in good-to-excellent ratings was seasonal in nature, and above the 10-year average, traders were apparently anticipating a better result. The fact that prices had fallen substantially during the two preceding sessions probably exaggerated the bounce. September corn futures surged 12.0 cents to $5.4825/bushel in early Tuesday trading, while December climbed 12.25 cents to $5.1625.
Soybeans lead the crop markets higher in early Tuesday action. Old crop concerns seemingly spurred nearby futures across the soy complex upward, while the deferred contracts also responded well to the lower crop rating on the Monday afternoon Crop Progress report. Oil futures also rose despite continued weakness in the Asian vegetable oil markets. August soybean futures jumped 21.25 cents to $14.75/bushel as the sun rose over Chicago Tuesday, while August soyoil bounced 0.21 cents to 46.05 cents/pound and August soymeal leapt $12.0 to $463.5/ton.
Wheat futures rebounded along with corn and soybeans Monday night. The old crop soybean situation may have offered support for the nearby winter wheat contracts, while Minneapolis prices also appeared to benefit from the lower reading for spring wheat conditions. September CBOT wheat advanced 9.5 cents to $6.79/bushel early Tuesday morning, while September KCBT wheat gained 9.75 cents to $7.1075 and September MGE futures lifted 6.75 cents to $7.62.
Cattle traders apparently think seasonal strength is looming. Although the latest cash and wholesale news has been mixed at best, cattle futures built upon their Monday rise in overnight trading. Bulls seemingly believe seasonal lows have been reached, thereby opening the door to a sustained advance during the weeks and months ahead. Unfortunately, there is no guarantee that the anticipated increases will justify the premiums already built into futures. August cattle rallied 0.20 cents to 122.65 cents/pound just after sunrise Tuesday, while December ascended 0.12 cents to 128.95. August feeder futures dipped 0.22 cents to 152.42 cents/pound as corn rebounded, and November slid 0.17 cents to 157.90.
Hog futures also rallied in early Monday trading. The fresh strength was rather surprising, since the Monday afternoon cash and wholesale reports were generally weaker than seen late last week. Actually, the late pork report was much improved from the midday reading, which may have encouraged buying. Their discounts to the CME index may also have sparked buying of the 2013 contracts. August hog futures ran up 0.27 cents to 95.82 cents/pound early Monday, while December increased 0.20 cents to 81.90.
Cotton futures were steady-mixed overnight. The white fiber contracts also seemed to respond well to news of diminished readings on the weekly USDA Crop Progress report. Bulls could also point to strength spilling over from the other crop markets and to firm trading in the equity index futures and weakness in the U.S. dollar. However, Monday news that China is moving away from its stockpiling program could be a bearish factor for some time. October cotton was unchanged at 85.35 cents/pound in early Monday trading, while December edged up 0.32 cents to 85.42.