Corn futures are 5 to 9 cents higher at midday. December futures have moved to a premium to the September contract and have posted a new all-time high at $8.29 ¾. Corn prices are strengthening as traders are nervously awaiting USDA’s Crop Production report on Friday. Weekly export sales totaled 43.4 million bushels. Sales were solid, but include a large sale to Mexico that was already announced.

Soybean futures are sharply higher at midday. September soybean futures are trading 39 cents higher and November is up 35 cents. For the second day in a row, USDA has announced large daily soybean sales. Today’s update was for 165,000 tonnes to China. There is speculation that more sales have been made to China. Traders see this as evidence that the recent correction went far enough to encourage a new round of Chinese buying. USDA reports August production prospects on Friday morning. With this Chinese buying and all the uncertainty surrounding the USDA reports, it may cause for some market bears to whittle back on their short positions.

Wheat futures are showing strong gains in midday trade, with CBOT up 13 ¾ cents to $9.27 ¼; KCBT wheat up 10 ¼ cents to $9.14 and MGE wheat up 15 ½ cents to $9.68. There are multiple drivers in the gains. First there is spillover support from rebounding prices for corn and soybeans ahead of Friday’s August Crop Report from USDA. Second, there are renewed prospects for Russia to impose a sales embargo despite repeated denials that such an embargo will be necessary because Russian production estimates continue to fall. And third, an update of the NWS national “Drought Monitor” shows that extreme to exceptional drought conditions have shifted westward in the past two weeks, with all of Oklahoma, most of Kansas and much of Texas under extreme to exceptional drought as growers work powder-dry soils for seeding of the 2013 hard red winter wheat crop.

Live cattle futures are mostly higher at midsession. Processors are boosting cash bids and cash trade in Nebraska was reported at $190 per cwt, up $5 from last week. Beef prices also continue to strengthen and weekly beef exports were solid again at 18,500 mt. All this is contributing the firmer tone at the CME.

Lean hog futures are higher at midday on Thursday. Futures prices are well below the current cash price index which is supporting nearby contracts. Higher corn prices are also positive for deferred hog futures contracts. But cash hog prices continue to fall and some liquidation of the breeding herd is occurring with December hog futures about $20 per cwt below the breakeven price of corn prices stay high. The October contract is up $1.02 at $76.65. December is 45 cents higher at $74.08 at midday.