Corn futures are trading 4 to 5 cents higher early morning. Corn futures extended gains into the overnight session after an impressive run on Monday. Prices continue to be supported by reports of poor yields as harvest begins across the U.S. 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.

Soybean futures are trading 27 to 28 cents higher early morning. New crop soybeans (November) hit a record high of $17.09 during overnight trade on tight supply fears. The trade is concerned that global stocks could become very close to reaching a zero balance after 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.

Wheat futures are trading 2 to 7 cents higher early morning. Although not as bullish as the corn and soybean markets, the wheat market was is currently underpinned by news that Russia may limit wheat exports due to poor production output. Two Russian grain marketing firms reduced their 2012 wheat output after initial harvest’s in Urals and Siberia were worse than expected. The selloff in the U.S. dollar should be friendly for prices as well.

Live cattle are called to open higher this morning. Continued upside momentum in beef prices are expected to support futures once again. Increased demand for beef products ahead to the September 3rd holiday will also strengthen cattle futures. Cash trade is anticipated to pick up the latter half of the week with prices expected to be steady to higher.

Lean hogs are called to open mixed early morning. Prices are expected to be 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, futures will be supported by the renewed strength in the pork carcass value and futures discount to cash.

Cotton futures are trading mixed early morning. Prices are pressured slightly this morning on profit taking. Prices jumped over 2 percent yesterday on technical buying. Prices are expected to trade both sides of the market; supported by disappointing monsoon rains in India, but pressured by large global supplies and waning demand.