U.S. corn futures are expected to start lower Wednesday as weather forecasts indicate rains will give crops a boost.
Traders predict corn for December delivery, the most actively traded contract, will open down 4 cents to 6 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract slid 5 1/4 cents, or 0.8%, to $6.81 1/2 a bushel.
Expectations for rain are weighing on prices as they ease output concerns following a recent Midwestern heat wave. Traders are paying close attention to the weather because farmers need favorable conditions to grow a large crop to replenish low inventories.
"Weather, at least for the western belt and the northern plains, has shown some improvement over the past few days," said Sterling Smith, analyst for Country Hedging, a brokerage firm in Minnesota.
Corn prices have pulled back 14% from all-time highs in early June as concerns about tight supplies have eased. Yet, users of the grain remain jittery about the developing crop, which was planted this spring and will be harvested in the autumn, because inventories are still projected to reach a 15-year low this year.
Weather forecasts show "heat will return as a big story for central and southern parts of the Midwest" on Wednesday and Thursday but should taper off considerably Friday and Saturday, according to meteorologists at Freese-Notis Weather, a private weather firm. Hot weather can hurt corn because it stresses the crop and, if it persists during the night, doesn't allow plants to rest.
"At least this heat will not last as long as last week," the Freese-Notis meteorologists wrote in a forecast.
Northern and western parts of the Midwest will see the best rains Wednesday and Thursday, according to Freese-Notis. Rain chances will reach the southeastern Corn Belt, "where they really need it," by Friday, the firm predicted.