U.S. corn futures are expected to start lower Wednesday on hopes drier weather will allow farmers to advance planting in the western Midwest after early delays due to cool, wet conditions.
Traders and analysts predict corn for July delivery, the most actively traded contract, will open down 8 cents to 10 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract slid 1.1%, or 8 1/2 cents, to $7.64 1/4 a bushel.
Leading prices lower are forecasts for farmers to see less rain in key growing states like Iowa, Nebraska, Minnesota, North Dakota and South Dakota. The drier weather will "allow for some planting" to take place, said Joel Burgio, senior agricultural meteorologist for Telvent DTN, a private forecaster.
Traders are paying close attention to changes in weather forecasts due to nervousness about low inventory levels. Farmers need to grow a large corn crop to replenish supplies, which are projected to reach a 15-year low before harvest next fall.
"The pattern overall looks warmer and drier for western fields," said Bryce Knorr, analyst for Farm Futures, an agricultural publication.
Expectations for improved weather are pressuring corn after the market closed Tuesday at its highest level since reaching a record high April 11. Futures are down about 3% from the record but have more than doubled since last summer on strong demand from foreign buyers and domestic livestock and ethanol producers.
Yet, a large harvest is far from guaranteed. The eastern Midwest, including states like Indiana and Ohio, remains too cool and wet, forecasters said. Temperatures in the western Midwest also will still stay cool, which can slow plantings because soil temperatures need to rise to help seeds germinate.
"I think that there will be corn planting that gets done in the western Corn Belt over the next ten days, but probably not reaching the type of pace that is normally seen there for this time of year," predicted Freese-Notis Weather, a private weather firm.
The U.S. Department of Agriculture will issue its next update on planting progress in a weekly crop report Monday. Farmers had sown 9% of the crop as of Sunday, below the average of 23% for that time of year.