Traders are likely adjusting positions ahead of today’s USDA reports. The USDA will release its latest Crop Production and WASDE reports at 11:00 AM CST, which could have a huge impact upon agricultural markets. Corn futures have recently declined in anticipation of bearish data. However, they bounced Thursday night, which probably reflected short-covering ahead of the reports. December corn futures rose 1.5 cents to $4.22/bushel early Friday morning, while May added 1.25 cents to $4.4125.

The soy complex was decidedly mixed overnight. The mixed action may represent the results of traders carrying out pre-report positioning, since bean and product futures have seen more two-sided trading lately. News that the FDA is seeking to regulate trans fats in foods is apparently weighing upon the oil market, whereas robust demand is reportedly supporting meal prices. January soybean futures slid 3.0 cents to $12.635/bushel in pre-dawn trading, while December soyoil fell 0.37 cents to 40.37 cents/pound, and December soymeal gained $1.0 to $404.8/ton.

Short covering may also have boosted the wheat markets Thursday night. Although the Crop Production report may have limited application to the wheat outlook, the WASDE report could prove to be very important. Thus, it wasn’t terribly surprising to see short-covering push the nearby wheat contracts modestly higher last night. December CBOT wheat futures edged up 1.0 cent to $6.54/bushel in early Friday trading, while December KCBT wheat futures crept up 1.0 cent to $7.135, and December MWE futures advanced 1.75 to $7.1125.

Cash and wholesale weakness are depressing cattle futures. Traders had become less optimistic about cash prospects as the week passed, especially with choice cutout values declining simultaneously. Country cattle dipped $1.00 to $131.00/cwt (cents/pound) Thursday afternoon, thereby confirming those fears and exerting additional downward pressure upon CME prices. December cattle futures slipped 0.10 cents to 131.57 cents/pound Thursday night, while April futures slumped 0.12 to 134.07. January feeder cattle actually firmed, rising 0.07 cents to 165.20 cents/pound, while March feeders rallied 0.12 cents to 164.95.

Hog futures are getting supportive news from other markets. In contrast to the cattle/beef complex, cash hog and pork prices proved surprisingly strong Thursday. The fact that many in the industry are anticipating persistent seasonal weakness probably exaggerated the impact of those gains. December hog futures climbed 0.35 cents at 87.90 cents/pound as Friday dawned over Chicago, while April ran up 0.22 to 93.40.

Pessimism seems likely to dominate the cotton market into the reports. The cotton industry has recently been persuaded that the current U.S. harvest will be surprisingly large, which seemingly explains the persistent weakness exhibited by ICE futures. The losses experienced once again Thursday night suggests they will maintain those short positions into the late-morning USDA reports. December cotton sank 0.45 cents to 76.31 cents/pound around sunrise Friday, while March cotton tumbled 0.49 to 78.37.