The corn market set back from technical resistance Tuesday morning. The corn reading on the weekly USDA Crop Progress report fell more than anticipated Monday afternoon, thereby suggesting the recent CBOT rally would continue. However, that was not the case, with the various contracts declining modestly overnight. That very likely reflected the fact that most-active December futures failed to top chart resistance associated with its 40-day moving average. September corn slipped 4.0 cents to $4.8925/bushel in early Tuesday trading, while December declined 4.5 cents to $4.81.
The soy complex also sagged after Monday's big surge. The weekly Crop Progress report downgraded U.S. soybean conditions as well Monday afternoon, which certainly seemed supportive of continued gains. However, the initial readings of a well-publicized crop tour predicted South Dakota and Ohio results above those of the three-year average, thereby suggesting considerable production potential this fall. September soybeans dove 13.5 cents to $13.085/bushel just after dawn Tuesday, and November beans dropped 16.5 to $12.8675. September soyoil tumbled 0.35 cents to 43.10 cents/pound, while September soymeal slid $4.5 to $415.8/ton.
Wheat futures were mixed in early Tuesday trading. The winter wheat contracts declined in concert with corn and soybeans, but their spring wheat counterparts rose slightly. The reasons for the latter bounce are not at all clear, especially after the Crop Progress report stated the latest Northern Plains readings at comparatively high levels. September CBOT wheat fell 4.0 cents to $6.375/bushel early Tuesday morning, while September KCBT wheat skidded 2.25 cents to $7.01, whereas September MGE futures edged up 0.5 cent to $7.4575.
Cattle futures traded in mixed fashion overnight. The fact that choice cutout values rose significantly apparently supported the nearby contracts, but deferred futures inched lower. That may mark a reaction to concurrent grain and soy losses, since those suggest cheaper feed and greater incentives for livestock industry expansion down the road. October cattle futures rose 0.17 cents to 128.25 cents/pound just after sunrise Tuesday, while December gained 0.02 cents to 130.47. September feeder cattle futures also sagged, losing 0.02 cents to 157.92 cents/pound, and November descended 0.35 cents to 160.12.
Dropping wholesale values depressed lean hog futures Tuesday morning. Although the cash markets in the western Corn Belt were stable Monday, a big drop in pork cutout values rather obviously dragged CME lean hog futures lower last night. Traders rightly worry that a big seasonal breakdown in cash and wholesale values is coming. October hog futures edged 0.15 cents lower to 86.32 cents/pound as trading accelerated Tuesday morning, while December slumped 0.20 cents to 83.25.
The cotton market reacted as one would expect to the Crop Progress report. The weekly USDA Crop Progress report stated the current U.S. cotton crop at 46% good to excellent, which represented a 3% weekly improvement. Timely rains in the Southern Plains caused huge ratings increases in that region, but the Southeast is suffering from excessive moisture. December cotton futures sank 1.06 cents to 91.80 cents/pound in early Tuesday trading, while March lost 1.00 cent to 89.00.