U.S. corn futures are expected to start stronger Tuesday as traders worry farmers will harvest a smaller-than-expected crop next fall due to planting delays in the eastern Midwest.
Traders predict corn for July delivery, the most-actively traded contract, will open 5 cents to 7 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 7 1/2 cents, or 1.1%, to $7.15 a bushel.
Concerns about planting are front and center after data issued by the U.S. Department of Agriculture on Monday showed farmers in the eastern Midwest are struggling to sow the crop. Farmers nationwide need to harvest a large crop next fall to rebuild inventories that are projected to fall to a 15-year low this year.
"There is still a lot of corn to be planted in the eastern and far northwestern Corn Belt and that should keep good buying support under the market," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
Market participants are on edge about supply levels after corn futures reached record highs last month as demand stayed strong in the face of surging prices. Prices have since pulled back 9%.
Planting delays are keeping supply worries alive as corn tends to produce lower yields in many areas if it is planted past the middle of May. The USDA, in a weekly crop report Monday, said farmers had sown 40% of the crop as of Sunday, up from 13% a week earlier.
Farmers made big strides in planting in western Midwest states like Iowa and Nebraska. Yet, cool, wet weather continued to disrupt planting in eastern Midwest states like Indiana and Ohio. Overall, the country's progress lagged behind the average of 59% for that time of year.
"The real problem for the corn market is that we have not planted 50% of the crop and it is now the 10th of May, so we are bound to see some of the top end taken off yields," Pfitzenmaier said.
Traders are worried farmers will not sow all the 92.2 million acres of corn the USDA projected earlier this year. Some of the acres may be planted with other crops, such as soybeans, which can be sown later in the spring without lowering yield potential. A planted area of "just under 91 million acres is more realistic" for corn, Pfitzenmaier said.
Private weather firm Telvent DTN warned said delays will continue for the eastern and southern Midwest and Mississippi Delta due to very wet fields and serious river flooding. In the northern Plains, heavy rains, thunderstorms and cooler conditions early this week will keep field work and any planting very slow, the firm said.
The U.S. is the world's top corn exporter.