U.S. corn futures are poised to open lower Wednesday amid profit-taking after recent gains, although losses could be limited by a troubled U.S. crop.
Traders expect Chicago Board of Trade futures to open 1 to 2 cents lower. In overnight trade, September corn was down 1 1/4 cents to $7.29 per bushel.
A key headwind for the market is that prices for corn, as well as soybeans, are already very high historically.
"The dominant theme is these markets, at these levels, are dialing in an awful lot of positive news," said Don Roose, president of U.S. Commodities in Des Moines, Iowa.
Some traders are taking profits on long positions after watching the market climb 8% since Aug. 8. The market is facing overhead resistance in the December contract at the $7.50 level, Roose said, and corn demand has been weak at prices above $7. But some traders expect demand would re-emerge on any significant break in prices.
Outside markets including equities, which had supported the market earlier this week, are neutral Wednesday morning, Roose added.
Still, traders and analysts remain worried by a steady stream of troubling reports about the U.S. crop from a crop tour this week. Scouts on the Pro Farmer Midwest crop tour on Tuesday found potential yields in Indiana well below the trend, at 143.1 bushels per acre. The tour last year projected a yield of 167.1 bushels per acre.
A wet spring followed by a hot, dry summer has stressed corn in many fields in the state.
Nebraska's crop also appears disappointing, with an average yield of 153.7 bushels per acre, down 3% from the crop tour's projection last year.
Internationally, China's corn prices rose to an all-time high in the week to Wednesday on the back of tight supply ahead of the harvest, which is due around October. Meanwhile, demand remains strong thanks to generous profit margins for pig farmers, who are expanding hog production.