Corn futures firmed overnight despite a higher reading on the weekly USDA Crop Progress report. Fine conditions in the western Corn Belt more than offset further deterioration of the crop in the waterlogged eastern region. Actually, one has to wonder if news that China’s imports of distillers grains set a fresh record last month supported prices, since that implies persistently huge demand for corn and products from the Asian giant. September corn futures inched up 0.75 cent to $4.0575/bushel in early Tuesday trading, while December added 0.5 to reach $4.165. 

The soy complex rallied despite an anticipated result on the Crop Progress report. The U.S. bean crop was rated one point lower this week than last week, but that was widely expected. A rise in palm oil quotes probably sparked overnight oil gains, and traders may view underlying demand strength as being supportive of the meal market. Technical support probably played a role in the advance. Still, the rise is rather impressive since came after China reported huge June imports of South American beans.  August soybeans climbed 5.25 cents to $10.13/bushel Monday night, while August soyoil rallied 0.29 cents to 31.97 cents/pound and August meal moved up $2.7 to $358.7/ton.    

The wheat markets are trading steady-mixed in early Tuesday action, with the slightly seasonal decline in the spring wheat rating (from 71% good-excellent) to 70% seemingly supporting the Minneapolis market. It’s actually rather surprising that the winter wheat markets didn’t rise significantly, since the harvest progress total continues running behind historical norms. The fact that much of the grain that is unharvested is in swampy southeastern areas of the Corn Belt doesn’t bode well for the finish of the winter wheat harvest. September CBOT wheat futures edged 0.25 cent higher to $5.33/bushel shortly after sunrise Tuesday, while Sep KC wheat gained 1.75 cents to $5.2725/bushel, and September MWE rose 2.75 cents to $5.6175.    

Firm beef quotes likely supported cattle futures Monday. The early-summer dive in U.S. beef cutout values rather clearly played a major role in the concurrent breakdown in fed cattle prices across the country and in Chicago. Thus, it wasn’t terribly surprising to see CME futures stabilize after the midsession beef report indicated a moderate rebound in beef quotes. The fact that bears couldn’t generate a serious challenge of August futures support around the 146-cent level probably encouraged buying as well. Afternoon action suggests a steady-firm opening today. August cattle inched up 0.10 cents to 146.75 cents/pound at their Monday settlement, while December futures slipped 0.07 to 151.15.  Meanwhile, August feeder cattle futures surged 1.12 cents to 216.32 cents/pound on Monday’s corn dive, and November feeders jumped 1.22 to 211.22.    

Pessimism about the midsummer outlook seemingly depressed August hogs yesterday, since the nearby contract proved unable to sustain early gains despite firming pork quotes. Pork cutout values were steady-firm at noon, whereas direct-market cash quotes were scarce. The fact that the CME index is expected to fall back below the 80-cent level, as well as last week’s huge midsummer slaughter total probably encouraged selling as well. Afternoon reports of cash slippage seem likely to weigh on futures again today. August hog futures closed 0.77 cents lower at 74.90 cents/pound Monday, while December skidded 0.17 cents to 60.50.   

ICE cotton futures traded weakly overnight in seeming response to a flat reading on the growing U.S. crop. Texas conditions were also seen as unchanged. The fiber market slipped despite early-morning losses in the value of the dollar, as well as a report of big Chinese imports of U.S. cotton last month. The slide may simply represent a bearish follow-through in the wake of yesterday’s failure of technical chart support. December cotton futures sagged 0.15 cents to 64.52 cents/pound, while March slid 0.25 cents to 64.36.