U.S. corn futures are expected to open slightly lower Thursday as profit taking by traders is expected to trump strong export sales numbers.
Traders predict corn for March delivery, the most-active contract, will start 2 cents to 3 cents a bushel lower at the Chicago Board of Trade. In electronic trading overnight, the contract fell 2 1/4 cents, or 0.3%, to $6.67 a bushel.
Corn futures hit fresh 30-month highs Wednesday as concerns over low supplies persisted and wheat prices surged. Analysts expect the new high to fuel selling as traders book profits from the recent run up in prices. Further pressure is likely from strength in the U.S. dollar, which makes dollar-denominated commodities less attractive to foreign buyers.
The U.S. Department of Agriculture reported Thursday corn export sales of more than 1.2 million metric tons for the last full week of January. Included in those figures were net sales of 1.17 million metric tons for the current marketing year, which were the highest sales so far for 2010-11. Net sales for the week came in well ahead of analysts' expectations.
But one strong week of export sales doesn't make a trend, and traders will need further evidence corn export sales are strengthening before pushing prices higher, said Bryce Knorr, analyst for Farm Futures.
"We probably need to see this sustained," he said.
U.S. corn exports face pressure from other parts of the world, particularly from countries looking to export low-quality wheat that, like corn, is used for animal feed. Analysts said Ukraine officials have signaled the country is lifting export restrictions and Australian wheat exports are likely to remain strong as extremely wet weather in that country left a large share of its wheat crop unfit for human consumption.
Knorr expects corn for now to follow wheat and soybean prices, yet strong exports or continued robust demand from producers of the corn-based fuel additive ethanol could provide new support for prices as supplies remain tight.