Corn futures are trading higher midmorning. Corn futures are extending gains as the trade focuses on the possibility that production output may fall short of USDA projections. Scouts on the ProFarmer tour are reporting that crops are worse off than expected and analysts are speculating prices to rise further to ration demand for dwindling corn supplies. USDA reports that approximately 4 percent of the nation’s corn is harvested already (lead by the southern states), and that the condition of the 2012/13 corn crop remains steady at 23 percent. As of this writing September and December contracts are 11 cents higher.

Soybean futures are trading moderately higher midmorning. New crop beans (November) continue to push higher on long term fundamentals, especially tight supply worries. The trade is concerned that global stocks could become very close to reaching a zero balance as the U.S. harvest ends and before the South American begins. USDA reported on Monday that the condition of the 2012/13 bean crop is showing improvement with a one percent increase in its good/excellent ratio and reductions in the poor/very poor categories. As of this writing, September beans are 39 cents higher at $17.43 while November beans are 38 ¾ cents higher at $17.22.

Wheat futures are trading 12 to 13 cents higher midmorning. Futures are gaining upside momentum as corn and soybean futures skyrocket fueled by poor yield projections and tight supply worries. The selloff in the U.S. dollar has also sparked renewed buying interest in the wheat market as well. Russian wheat production remains of interest to the market. Traders will continue to focus on the wheat production in the Black Sea Region, as speculative news circulates that Russia may limit wheat exports due to poor production output and as recent harvests are rated as worse than expected.

Live cattle futures are under pressure midmorning. Prices are trading lower at midday on apathetic trade and lack of direction. Although beef prices are strengthening, general market fundamentals are not lending support. Cash trade is anticipated to pick up the latter half of the week with prices expected to be steady to higher. Preliminary asking prices are $123 plus in the South and $195 plus in the North. October is trading 17 cents lower while December down 20 cents.

Lean hogs futures are trading lower midmorning. Prices being pressured by weakness in the cash market and growing pork supply concerns. Yesterday’s hog slaughter of 424,000 head support traders fears that an increasing pork supply will be burdensome for futures in the short term. However, losses should be limited by renewed strength in the pork carcass value and futures discount to cash. The October and December contracts are both down 25 cents.