U.S. corn futures are poised for a lower start Monday, succumbing to broader based commodity weakness and talk of some open windows of opportunity for plantings this week in the western Midwest.
Analysts expect corn to open 4 cents to 7 cents lower. In overnight electronic trading, corn for May delivery dropped 7 cents, or 0.9%, to $7.47 a bushel, the most-active July contract was down 5 1/4 cents or 0.7% at $7.51 1/4.
Weather will remain the driving force behind price moves in corn, with drier outlooks for the western Midwest this week providing potential for a pick up in the seeding pace for a crop already being planted at half the pace of normal for this time of year, analysts said.
Corn traders are following weather forecasts closely because farmers need good weather to grow a large crop to replenish inventories. Concerns about strong demand draining supplies recently pushed prices to a record high of $7.83 3/4 a bushel.
Earlier corn planting is typically better for final yields, as it reduces the chance the crop will still be developing when the season's first frost hits.
The U. S. Department of Agriculture will issue an update on planting progress in a weekly report Monday. Analysts estimate planting will be 14%-18% complete, representing the third slowest on record, below the average of 40% for this time of year.
The Telvent DTN weather forecast said heavy rains through the eastern and southern Midwest and Delta will continue to threaten severe flooding this week, Field work and plantings will be limited. Longer range maps may allow for some drier weather in this area while the heavy rains shift into the western and northern Midwest but this is somewhat uncertain, Telvent added.
The USDA is scheduled to release its weekly export inspections report at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.
"The corn seeding rate will be able to advance this week in the western and central Midwest, while wet weather floods the Delta and eastern Midwest," said Dan Basse, president AgResource Co in Chicago in a market note.
Some 35% of the Midwest will endure lengthy corn planting delays, while portions of the west and northern Midwest will have improved conditions, providing fodder for both supportive and negative price outlooks, Basse added.
Corn is also expected to stumble on the ripple effects of outside markets, as traders reduce risk exposure with news of the death of Osama Bin Laden eliminating some geo political issues while supporting the U.S. dollar.
The death of Bin Laden--the leader of al Qaeda and a mastermind of the largest terrorist attack in American history--is expected to take some risk away from energy markets, and subsequently pressuring grain and oilseeds used to make biofuels.
Meanwhile, grain users are stepping up to do some bargain buying amid lingering concerns about the crop and about inventories, which are projected to shrink to a 15-year low before harvest gets into full swing, analysts said.