U.S. corn futures are expected to open higher Tuesday on demand expectations, outside market support and farmers' reluctance to sell.
Chicago Board of Trade futures are called 10 to 12 cents higher. In overnight trade, December corn was up 11 1/4 cents to $7.03 1/2 per bushel.
The market surged overnight after a late rally Monday erased early losses. Expectations that China was poised to import more corn is helping support the market, analysts say. They note that the slide in U.S. corn futures during September has occurred even as China prices have stayed at record highs, giving them incentive to import.
Any purchases by China would reaffirm ideas that while corn struggles to find buyers as the market climbs near $8, buyers see any breaks below $7 as a solid buying opportunity. U.S. corn supplies are expected to remain tight for the foreseeable future, with some analysts saying it could take years to replenish stockpiles that have dwindled to historically low levels.
The market's recent from Aug. 30 to Monday's intraday low of $6.76 1/2, December corn fell nearly a dollar. That has encouraged some buying by some end-users, who have good margins with the lower prices, said Chad Henderson, analyst with Prime Ag Consultants.
"You've got a slowdown in farmer selling on the corn side with this pull-back," Henderson added.
Corn and other agricultural commodities are expected to get additional support Tuesday from outside financial markets, which were a negative factor Monday. Equities are expected to climb on possible progress on Greece's crisis and potential stimulus efforts by the U.S. Federal Reserve, easing worries about the economy for the moment.
Adding support to grains and oilseeds is the government's crop progress report Monday, although traders said corn crop conditions are not highly important this late in the growing season. The U.S. Department of Agriculture reported 51% of the crop was rated good-to-excellent, down from 53% the prior week.
Traders say the market's technical outlook could also inspire more buying, after the market recovered from sharp initial losses Monday to close unchanged.