CHICAGO (Dow Jones)-- Chicago Board of Trade corn futures are expected to open slightly higher Friday on government reports considered a little friendly.

The U.S. Department of Agriculture's projections for the corn crop were in line with analyst expectations. The USDA Friday projected output of 12.955 billion bushels in 2009, up from its August estimate of 12.761 billion bushels and above the average analyst guess of 12.932 billion.

Yield was projected at 161.9 bushels per acre, up slightly from the average trade guess of 161.5 bushels and up from the August estimate of 159.5 bushels. Analysts have said crop expectations have grown amid favorable weather.

"The production and yield estimates for corn and soybeans were uneventful, but the lower-than-expected new crop ending stocks were a surprise, as the USDA does not anticipate a build up in stocks despite higher output," said Joe Victor, vice president/marketing for Allendale.

The USDA projected 2009-10 ending stocks of 1.635 billion bushels, up slightly from an August estimate of 1.621 billion but below the average trade guess of 1.768 billion.

The USDA increased its feed and export demand projections from August, and lowered its 2009-10 beginning stocks.

"To me, it's as friendly as 1.635 can be," Jason Britt, president of Central State Commodities, said of the new crop ending stocks. "That doesn't mean we're going to $4 any time soon, but it's not a 2 billion carryout."

Weather forecasts remain benign, but the market could get support from the dollar's struggles, analysts said.

In overnight trading, September corn was down 1/4 cent to $3.09 1/4 per bushel, December corn was down 1/4 cent to $3.15 and March corn was up 3/4 cent to $3.29 1/2.

The USDA also released weekly net export sales, which were strong. The USDA reported net sales of 1.02 million metric tons, including 1.03 million for 2009-10 and a net loss of 8,300 for 2008-09.

Analysts had projected sales between 400,000 and 600,000 metric tons.

The next upside price objective is to push corn prices above solid technical resistance at last week's high of $3.32 a bushel. The next downside price objective for the bears is to push and close prices below major psychological support at $3.00 a bushel.

First resistance for December corn is seen at Thursday's high of $3.19 and then at $3.21 1/2. First support is seen at $3.10 and then at Thursday's low of $3.08 1/2.

In international news, the Chinese government's announcement on making soybean and corn purchases in the northeast a long-term policy will help prevent fluctuation in prices in the longer run, analysts said Friday.

China will continue to buy soybean and corn for state reserves from the northeast whenever appropriate, the State Council said in a statement Friday.


-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com