U.S. corn futures are expected to rise for a second day Tuesday as the market continues to recover from last week's steep slide.
Traders predict corn for December delivery, the most actively traded contract, will start trading up 12 cents to 14 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract rose 14 1/2 cents, or 2.2%, to $6.62 1/2 a bushel.
Prices are rebounding as it seems selling by commodity funds has run its course after the market dropped nearly 8% last week on global economic jitters. Traders said it appeared the market set a short-term low Monday when prices approached a three-month low overnight before finishing higher.
"The recent bout of liquidation has dissipated for now," wrote analysts for Barclays Capital.
Traders said last week's sell-off looked excessive, considering inventories of U.S. corn are historically low. Prices for the grain have pulled back 17% since reaching an all-time high in June, including an 13.5% dip since late August.
The decline in prices has attracted grain users who see the setback as a buying opportunity. Their purchases are helping the market rebound.
The Seoul-based Korea Feed Association on Tuesday bought two cargoes of corn totaling 110,000 metric tons, trading executives said, noting at least one came from the U.S. Traders also continued to talk about the potential for China to buy U.S. corn, although no deals have been confirmed. Traders pay close attention to chatter about China entering the market because it has the potential to buy major quantities and its import needs are unknown.
"China can now profitably import U.S corn," said Joel Karlin, analyst for Western Milling, a livestock and feed company in California.
In other news, the U.S. Department of Agriculture said farmers had harvested 15% of the corn crop as of Sunday. That was down one percentage point from the five-year average for that time of year and below traders' expectations that harvest would be about 20% complete.