U.S. corn futures are expected to start stronger Thursday on worries wet weather will delay planting, as well as government export data that didn't show high prices are slowing demand.
Traders and analysts predict corn for July delivery, the most actively traded contract, will start 4 to 6 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 6 1/4 cents, or 0.8%, to $7.46 3/4 a bushel. Corn for December delivery, which represents the crop that is being planted for harvest next fall, rose 4 3/4 cents, or 0.7%, overnight to $6.60 1/4 a bushel.
Futures are rebounding from a slide Wednesday on ongoing concerns farmers will not be able to sow the crop in a timely manner. Forecasts show conditions will remain wet throughout the Midwest, despite chatter Wednesday about a warmer, drier long-term outlook.
"After a drier forecast yesterday in the 11-15 day period for the Midwest, some precipitation has been put back in," said Doug Bergman, futures and options broker for MF Global.
Traders are on edge about the weather because the country needs to grow a large corn crop to replenish inventories, which are projected to reach a 15-year low before harvest next fall. Nearby corn futures recently reached record highs on concerns about strong demand draining supplies.
Foreign buyers slowed their purchases of corn in the week ended April 14, according to weekly export-sales data issued Thursday by the U.S. Department of Agriculture. U.S. corn sales for delivery in the marketing year that ends Aug. 31 were 613,400 tons, down 28% from the previous week and 43 percent from the prior 4-week average.
However, analysts said it was too soon to say high prices were curbing demand. The sales were within traders' expectations of 500,000 to 1 million tons.
"The numbers this morning were kind of neutral for corn," said Rich Nelson, director of research at Allendale, an agricultural research and brokerage firm in Illinois.
Traders are wondering whether high prices may be slowing demand for corn used to make ethanol, as well. Production of the corn-based biofuel fell to a seven-month low of 856,000 barrels a day in the week ended April 15, down 4.7% from the previous week, according to government figures. Analysts said more data was needed to prove a slowdown, noting chatter that production may have slowed while some plants underwent spring maintenance.