CHICAGO (Dow Jones)--Strong U.S. crop conditions, bearish signals from outside markets and a rally in the U.S. dollar are expected to shove U.S. corn futures lower early Tuesday.

July corn on the Chicago Board of Trade is called to open 4 to 6 cents a bushel lower. In overnight electronic trading, CBOT July corn dropped 5 1/2 cents, or 1.5%, to $3.65 1/2.

The grains are expected to stay under pressure from losses in outside financial markets and strength in the dollar. A firm greenback is often seen as unsupportive because of the perception that it makes U.S. grain less attractive to foreign buyers and reduces investors' appetite for risk.

The dollar gained sharply Tuesday as concerns about the euro-zone sovereign debt crisis combined with worry that North Korea was ratcheting up military tension with South Korea. The euro came within striking distance of a fresh four-year low against the dollar.

"Weakness in Europe once again ignited selling pressure in the U.S., forcing funds to exit long positions in stocks and in commodities," said Brian Hoops, president of Midwest Market Solutions.

Warm, dry weather in the U.S. Midwest and improving crop ratings add fundamental pressure to prices, traders said. The U.S. Department of Agriculture on Monday increased its good-to-excellent rating for corn to 71% from 67% a week ago, exceeding industry expectations.

"Conditions are very conducive to crop development," Country Hedging said in a note.

Corn edged 2 cents higher Monday, despite strength in the dollar, but gave back the gains overnight. The stronger close on Monday put bulls and bears on a level near-term playing field, a technical analyst said.

The next downside price objective for the bears is to close CBOT July corn below solid technical support at $3.59, the technical analyst said. Bulls' next upside price objective is to push and close the contract above solid technical resistance at the May high of $3.85, he said.

First resistance for July corn is seen at Monday's high of $3.72 3/4 and then at $3.75. First support is seen at Monday's low of $3.67 3/4 and then at $3.65.


-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com