Larger-than-expected export sales are expected to shove U.S. corn futures higher early Friday as traders worry strong demand is draining supplies.

Traders predict corn for May delivery, the most-active contract, will start 4 to 8 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 5 cents, or 0.7%, to $7.01 1/2 a bushel.

Demand should support futures after prices sank earlier this week as global economic concerns spooked traders into reducing risk in agricultural markets, analysts said. Futures as of the close of trading Thursday were down 5% from a 31-month high reached Tuesday.

Futures recently topped two-year highs in an attempt to curb demand and entice farmers to expand plantings this spring to replenish tight supplies. Yet, demand remains robust, as the U.S. Department of Agriculture said Friday total export sales for the week ended Feb. 17 were 1.65 million tons, topping traders' expectations.

Sales of 1.5 million tons for delivery in the 2010-11 marketing year, which ends Aug. 31, were a marketing-year high and up 62% from the prior four-week average, according to government data. Mexico, which suffered crop losses earlier this month from a freak freeze, was a top buyer, snapping up 505,200 tons.

"Strong demand and tight ending-stocks projections remain underlying supportive factors," Doane Advisory Services, an agricultural advisory firm in St. Louis, said in a note to clients.

The recent setback in prices encouraged more buying from foreign customers, traders said. Japanese feed manufacturers have purchased around 300,000 metric tons of corn in the past 10 days and stepped up pricing of cargoes that have already been purchased to take advantage of the price break, according to trading executives.

Market participants are nervous about supplies due to a smaller-than-expected U.S. harvest last fall and persistently strong demand. The U.S. is the world's top corn exporter, depended on to keep the world well supplied.

USDA's Chief Economist Joseph Glauber predicted at an annual outlook conference that farmers will sow 4.3% more acres of corn this spring to take advantage of high prices and harvest a record crop of 13.73 billion bushels in the upcoming 2011-12 marketing year. Still, the large plantings don't guarantee a large harvest because Mother Nature could throw growers a curveball.

USDA predicted inventories, known as ending stocks, would rise 28% to 865 million bushels in the 2011-12 marketing year. That is below the one billion-bushel mark seen as a comfortable level for supplies.