U.S. corn futures are expected to start mixed Thursday as concerns about the upcoming crop battle lower-than-expected weekly export sales that indicate high prices are slowing demand for the grain.
Traders and analysts predict corn for July delivery, the most-actively traded contract, will open up to down 4 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract rose 0.5%, or 3 1/2 cents, to $7.62 3/4 a bushel.
Poor weekly export data from the U.S. Department of Agriculture should temper any gains, analysts said. Total sales for the week ended April 21 were 443,700 tons, below expectations of 600,000 to 1.2 million tons. Sales of 349,000 tons for delivery before the end of the crop's marketing year on Aug. 31 were down 43% from the previous week and 65% from the prior four-week average.
Traders are keeping a close eye on exports after prices soared to record highs earlier this month on strong demand. The surprising decline in sales fueled concerns high prices were reducing demand.
"Because we had this spike in prices for several weeks in a row, it has had the opportunity to slow the demand side," said Mike Zuzolo, president of Global Commodity Analytics & Consulting, a brokerage in Indiana.
Yet, traders said they were more focused on the crop that is being planted for harvest next fall than on demand. Farmers need to produce a large crop to replenish inventories, which are projected to reach a 15-year low this year.
The crop season did not start off well due to cool, wet weather that delayed planting, but conditions are expected to turn warmer and drier heading into May. As of Sunday, the crop was 9% sown nationwide, below the average of 23% for that time of year.
There will still be some challenges for farmers, as eastern parts of the Corn Belt will have a cold, cloudy day Thursday, with areas of sprinkles or very light rains, according to Freese-Notis Weather, a private forecaster. Rain and thunderstorms will hit the western Corn Belt Friday night and move into the eastern Corn Belt and Delta for the weekend, the firm predicted.
"Completely dry weather is still not forecast, and it still looks like enough rain will fall that corn planting is going to remain slow," Freese-Notis said.
Lingering worries about planting should continue to lend some support to prices, particularly deferred futures contract months that represent the crop that will be harvested in the fall, analysts said. Corn also looks ready for a rebound after dropping 1.7% on Wednesday, they said.