Corn futures are trading 2 cents lower early morning. Futures continue to trade slightly below unchanged before the 7:30 am release of USDA’s September WASDE Report. This report is especially important for corn and soybeans because it will provide further insight into the state of the new crop, including the damage from one of the worst droughts on record. The average production estimate for corn is 10.403 billion bushels, approximately 376 million bushels lower than the previous month. Domestic 2012/13 ending stocks are anticipated to drop to 618 million bushels.

Soybean futures are trading 7 to 8 cents higher early morning. Quiet trade is characterizing the soy complex ahead of USDA’s WASDE Report. This report will provide insight into the state of the new crop soybeans. The trade is anticipating USDA to slash production output estimates and yield projections due to extreme drought conditions this summer. Production output is expected to average 2.638 billion bushels, down 54 million bushels from last month. Domestic 2012/13 ending stocks are pegged at 106 million bushels, a drop of 9 million bushels.

Wheat futures are trading 2 to 5 cents lower early morning. Futures turned moderately lower during the overnight session, flirting near session lows. Today’s WASDE report will not provide any estimates for wheat but will instead provide estimates for domestic and global ending stocks. Domestic 2012/12 ending stocks are expected to average 709 million bushels, up 11 million bushels from the previous month. However, with the flurry of recent reductions in Russia, Australia, and the Black Sea Regions, traders expect global ending stocks to decline.

Live cattle futures are called to open mixed this morning. Prices are anticipated to see slight pressure from mixed wholesale beef prices. Choice cuts were reported as marginally higher on yesterday while select cuts plummeted $1.48. Expectations for higher cash prices this week should continue to lend support to futures. Market action today, is expected to be strongly influenced by USDA’s WASDE results for the grain complex.

Lean hog futures are called to open lower this morning. There is currently nothing fundamentally bullish about this market. Prices are anticipated to open lower, pressured by sluggish demand and consistently lower cash prices. Traders will keep a watchful eye on grain prices after the release of the WASDE report. If production and yields estimates decline as much as analyst expect, livestock producers could be faced with prolonged record high prices for corn and soybean meal.

Cotton futures are trading mostly lower this morning. USDA’s WASDE report is scheduled to be released this morning at 7:30 am CDT and results are expected to be mixed for cotton. The trade anticipates 2012/13 production output to average 17.4 million bales, down 300,000 bales from August. The trade is also expecting USDA to lower global ending stocks as well.