U.S. corn futures are poised for a lower start Friday, pressured by continued investor liquidation, improved planting weather and slowing export demand.
Analysts expect corn to open down 8 cents to 10 cents. In overnight electronic trading, the most-active July contract was down 10 1/4 cents or 1.4% at $6.98 1/2 a bushel, and Dec corn was down 11 cents or 1.7% at $6.44 3/4.
Traders remain cautious of buying into the market amid the fear of more widespread profit taking hitting commodity markets after a week of heavy liquidation. The result of a sharply higher U.S. dollar and concerns over the state of the global economy, and declining commodity demand are negative factors for futures, analysts said.
The uncertainty of weather forecasts will continue to drive futures, with traders closely eyeing Midwest conditions because farmers need good weather to grow a large crop to replenish inventories. Concerns about strong demand draining supplies previously pushed prices to a record high of $7.83 3/4 a bushel last month.
Earlier corn planting is typically better for final yields, as it reduces the chance the crop will still be developing when the season's first frost hits.
Weather forecasts indicate farmers will continue to struggle to plant the crop in the eastern belt and Delta, yet actively sow crops in the western belt. Rains are expected to keep soils soggy in the eastern Midwest and in the Mississippi Delta.
Weather conditions are favorable for active seedings in the west, with some areas of Iowa and Nebraska possibly finishing their plantings by this weekend, a cash connected CBOT broker said
Worries about a slow start to planting have been elevated this year because inventories are projected to fall to a 15-year low before next fall's harvest.
The Telvent DTN weather forecast said the heaviest rains in the U.S. corn-belt look to shift northward during the next 3-5 days, taking the pressure off the flooded areas of the eastern and southern Midwest and Delta region. However, this heavier rain may shift back to the south again during the 6-10 day period. This likely means continued delays to spring field work and planting, Telvent said.
Meanwhile, export sales of corn were less than expected in the weekly release from the government Thursday, signs that U.S. supplies are overpriced in the world market.
However, analysts expect futures to find some support ahead of the weekend, as signs of outside financial markets stabilizing are seen attracting some bargain hunting buying.