Although the Corn Belt seems likely to remain rather wet during the days just ahead, conditions drier than those seen through much of spring seem likely to prevail. There seems to be little threat of heat and/or dryness during the critical pollination period, which bodes well for the fall harvest. That may partially explain the overnight slippage in corn futures. Traders are also quite conscious of European financial problems as well as the ongoing breakdown in Chinese equities. Those concerns are likely weighing on prices as well. The US Dollar Index is down 0.24 to 96.64. September corn futures slid 0.5 cents to $4.2275/bushel Tuesday night, while December lost 0.75 cents to $4.3225.     

The soy complex proved surprisingly mixed Tuesday night, but firmed early this morning. Nearby beans led the way higher, with deferred contracts switching to higher quotes as well. Oil was mostly higher, thereby seeming to reflect concurrent energy strength rather than Asian palm oil losses. Meal quotes lagged, possibly due to concerns about the potential for reduced Chinese meal demand. The expiring July future may have reflected ideas about short old-crop supplies, whereas improved production prospects may be limiting gains.  August soybeans ran up 5.25 cents to $9.975/bushel shortly after dawn Wednesday, while August soyoil added 0.18 cents to 31.70 cents/pound, and July meal inched $04 higher to $342.9/ton.    

Prospects for drying conditions across the Great Plains depressed wheat futures again overnight, especially after Monday’s USDA Crop Progress report stated such a major surge in winter wheat harvesting last week. Northern dryness may be hurting spring wheat production potential somewhat, but that didn’t keep the Minneapolis market from lagging its winter-wheat counterparts in early action. The tenuous global financial situation may also be encouraging bears. September CBOT wheat futures fell 5.75 cents to $5.795/bushel in early Wednesday trading, while July KC wheat dropped 5.75 cents at $5.805/bushel, and September MWE slumped 8.5 to $6.15. 

Live cattle futures continued lower Tuesday then rebounded late in the day, despite cash beef values continuing their downward slide.  Monday’s afternoon USDA boxed beef cutout report stated choice cutout down 2.47 cents/pound and select down 4.13. Bears simply couldn’t force the nearby August contract below the 150-cent level. However, Tuesday’s beef losses were also quite large, which bodes ill for today’s opening. August cattle futures rallied 0.57 cents to 151.07 cents/pound Tuesday, while December futures rose 0.37 cents to 154.85.  Meanwhile, August feeder cattle futures edged up 0.15 cents to 217.12 cents/pound, and November feeders were unchanged at 213.00.  

Lean hogs futures rallied along with much of the livestock complex today. Buyer support continued to find its way to the hog market today as futures firmed. This burst of strength in the proteins could in part be tied to the significant pullback in corn and beans after the stocks-driven run-up.  In the longer run, hog traders are still keeping an eye on grain price hikes that could reduce finishing weights and further reduce farrowing intentions.  August hog futures gained .50 cents to 76.50 cents/pound Tuesday, while December was up .27 cents to 63.67. 

ICE cotton futures slid Tuesday perhaps as a casualty of the larger weakness in commodities and the stronger dollar.  Some analysts feel the Friday WASDE could reduce U.S. production by 500,000 bales. This would bring production down to 14 million bales.  Extra scrutiny will be placed on the Texas Planted Acreage report and a revised number, if there is one, will be reflected in the August report.  July cotton futures fell .96 cents to 65.47 cents/pound Tuesday, while December fell 1.13 to 65.82.