Corn futures were lower early Tuesday. USDA reported harvest progress at 95%, up from 91% a week ago and four points above the five-year average. While short on specifics, news that China is planning to move to a market driven system for grain prices seemed to weigh on grain prices generally. Basis levels are mostly steady to firm. The cash market is likely to provide the leadership as prices gradually rebound from record production and seasonal pressure from harvest. December corn futures were 4.75 cents lower at $4.20/bushel while May was also 4.75 lower to $4.345.

Soybeans and soyoil slipped in overnight trade, while soymeal were mixed. USDA did not update soybean harvest progress on Monday afternoon as harvest in many states are 100% completed. The potential for large South American crops in light of recent favorable weather added downward pressure on the beans. Soyoil is depressed by the weakness of Asian palm oil. January soybean futures fell 4.0 cents to $13.2525/bushel; December soyoil increased 0.05 cents to 40.71 cents/pound, and December soymeal descended $1.7 to $435.5/ton.

Wheat futures followed corn and soybean and moved lower on Tuesday morning. USDA said 62% of the winter wheat crop in good to excellent condition, down from 63% a week ago, which held no surprise to many people. December CBOT wheat futures skidded 5.5 cents to $6.47/bushel in early Monday trading, December KCBT wheat futures fell 3.0 cents to $7.005, and December MWE futures dipped 2.0 to $6.9875.

Cattle futures were steady/mixed early Tuesday. Cutouts were up sharply on Monday with Choice up $2.40 to $201.32 per cwt and Select up $1.46 to $188.28. The strength in the beef market should help underpin the cash and futures prices although the current chart pattern for cattle futures has a negative bias at least for the near-term. The December contract appears headed for a test of last week’s low at 130.67 and/or the 100 day moving average at 130.50. December cattle futures are up .175 cents to 131.25 with April .10 cents higher 132.80. Meanwhile, January feeder cattle are at .175 cents higher at 162.95 cents/pound, and March feeders are .05 lower at 162.75.

Cash hogs were steady to higher on Monday while the cut-out continues to soften. Cash is expected to maintain a steady to higher tone again Tuesday. However, December futures are at fairly steep premium to the cash leaving it vulnerable to selling pressure. Futures are consolidating just above recent lows. A close below 86.90 cents/pound would be negative technical signal for December contract. In early trade December hogs were .25 cents higher at 85.85 cents/pound while April was .225 cents higher to 93.525.

Although a large portion of equity index futures were not performing well, cotton continued to move upward on Tuesday early morning after Monday’s impressive gains, which was the biggest rally since August 13. At this point, cotton harvest progress was at 78% completed compared to average at 83%. Cotton futures December cotton jumped 0.84 cents to 77.8 cents/pound just after sunrise (EST) Tuesday, while March cotton rose 0.37 to 78.83.