U.S. corn futures are expected to start slightly higher Monday in an attempt to convince farmers to sow more acres this spring to replenish low supplies.
Traders predict corn for March delivery, the most-active contract, will open 1 to 3 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 2 1/4 cents, or 0.3%, to $6.59 1/2 a bushel.
Futures prices need to climb higher after reaching a 30-month high Friday to entice growers to expand plantings this spring, instead of switching acres to soybeans, analysts said. Growers need to harvest a big crop in the fall to rebuild end-of-season supplies, which are projected at a 15-year low.
Corn is competing for acres with soybeans, which are also trading at 30-month highs. Market participants said a corn plantings estimate issued Friday by private analytical firm Informa Economics was smaller than expected at 90.9 million acres. That was up 0.15% from the firm's December estimate and up 3% from a year earlier.
"The acreage battle is officially on," said Brenden Olson, an analyst for Country Hedging.
A minimal increase in plantings puts more pressure on farmers to grow individual corn plants with high yields. Concerns about the next crop, which will be sown this spring and harvested next fall, should be particularly supportive to deferred futures contracts, analysts said.
Yet improved weather conditions in Argentina, the world's second largest corn exporter, could limit gains, analysts said. Futures prices surged recently on fears a drought-reduced crop in Argentina would shift demand to the U.S., the world's largest exporter of the grain.
Scattered thundershowers will likely develop in Argentina from Tuesday into Wednesday and ease stress on crops, according to private weather firm Telvent DTN. In Brazil, another major exporter, scattered showers this week will mostly favor developing soybeans and corn, the firm noted.