Corn futures are called 1 to 2 cents lower. Overnight trade was 3/4 to 2 cents lower. Futures slipped below support at $2.38 1/4 on the December contract Tuesday, opening the way for a test of contract lows at $2.33 1/2. Despite strong demand numbers from USDA, the market is currently focused on the large U.S. crop as harvest activity is expected to begin ramping up soon.

Soybean futures are called steady to mixed. Overnight trade was unchanged to 1 1/4 cent higher. The market slipped to new contract lows again on Tuesday. Fundamentals remain bearish with ending stocks in 2006-07 expected to be record large. However, we look for some choppy trade as some short-covering is possible following recent weakness and USDA's production number that was right on pre-report trade estimates.

Wheat futures are called 1 to 2 cents lower. Overnight trade at the CBOT was steady to 2 cents lower and the KCBT was 1/4 to 2 cents lower. Follow-through selling and spillover weakness from corn are expected to weigh on futures again today. Technically, futures failed to break major support levels despite recent weakness. However, the market could continue to struggle until demand for U.S. wheat improves. Tight global supplies will likely remain an underlying supportive factor for now.

Cattle futures are called mixed as traders wait for cash market developments for direction. Boxed beef prices have been firming recently, but packer margins remain poor. Ideas are currently for near steady trade. Packers increased slaughter on Tuesday and may need to hold bids near steady to fulfill slaughter needs.

Lean hog futures are called steady to higher. Spillover strength and positive technical signals are expected to be supportive. Slaughter is running at record high levels and despite that, pork cutouts were up 81 cents on Tuesday. Demand remains strong and until cash turns lower, we look for futures to be firm.