Crop markets anticipating WASDE report at 11:00 AM CDT

Corn futures moved slightly lower in Tuesday night trading, although there seemed to be little news behind the slide. Indeed, one might interpret an overnight report that South Korea had bought 1.1 million tonnes of corn and wheat over the past five weeks would have supported the market. Ultimately, the decline may mark the departure of numerous bulls as the exited positions ahead of the late-morning WASDE report from the USDA. July corn futures slipped 0.75 cent to $6.5875/bushel early Wednesday morning, while December dipped 1.0 to $5.4975.

The same conditions that seemingly powered soybean futures upward Tuesday apparently continued supporting prices early Wednesday morning. That is, the tight old crop situation is probably boosting nearby futures, whereas the eventual negative production impact of late plantings may be encouraging buying of the deferred contracts. July soybean futures advanced 6.0 cents to $15.465/bushel as the sun rose over Chicago Wednesday, while July soyoil gained 0.15 cents to 48.19 cents/pound, and July soybean meal rose $3.5 to $466.9/ton.

Wheat futures also declined Tuesday night, but there were apparently solid reasons for the drop. That is, late reports out of Australia and Germany pointed to significantly increased production in the 2013/14 crop year, thereby reminding traders of the bearish global outlook through early 2014. Traders seem unlikely to push the market far in either direction ahead of the WASDE release. July CBOT wheat futures fell 5.0 cents to $6.9175/bushel in early Wednesday trading, while July KCBT wheat slid 3.75 to $7.2625, and July MGE futures skidded 1.5 cents to $8.1425.

After suffering repeated bouts of weakness in recent weeks, cattle futures posted significant gains early this week. Surprising wholesale strength on Monday probably played a part in the rise, but traders may also be rethinking ideas beef was overpriced as pork values have vaulted upward lately. August cattle rose 0.67 cents to 120.37 cents/pound early Wednesday morning, while December climbed 0.40 to 125.87. Meanwhile, August feeder cattle futures advanced 0.55 cents to 145.22 cents/pound, and November added 0.35 cents to 150.70.

Bulls continued dominating the hog pit Tuesday night, which was entirely understandable in the wake of the strong results of the afternoon cash and wholesale reports. The premium built into the expiring June contract suggests traders do not expect the advance to end quickly. July hog futures surged 0.60 cents to 99.75 cents/pound in early Wednesday trading, while December edged up 0.15 cents to 81.00.

The tight old crop situation seemingly boosted nearby cotton futures Tuesday, as did the slide suffered by the U.S. dollar. Trade in the expiring July contract and its options is also leading to disjointed trading in it and in the deferred contracts. We suspect new crop futures will move little prior to the late-morning release of the USDA WASDE report. July cotton futures sagged 0.07 cents to 87.99 cents/pound in early Wednesday morning activity, while December lost 0.23 to 84.95.