U.S. corn futures are expected to open higher Monday on worries about the crop and a weaker dollar that is offering broad support to commodities.
Futures at the Chicago Board of Trade are expected to open 8 to 10 cents higher. In overnight trade, corn for September delivery was up 9 cents, or 1.3%, to $7.20 per bushel. December corn was up 8 3/4 cents to $7.34.
The troubled state of the U.S. crop is driving the market, analysts said. It was stressed throughout July from hot, and in many places dry, weather. While the damage to the crop in July was mostly just speculation, analysts say that evidence of damage is starting to emerge.
"We're continuing to see the production concerns increase," said Shawn McCambridge, senior grains analyst for Jeffries/Bache in Chicago.
McCambridge said there are emerging reports of short ears, or ears that haven't completely filled with kernels, even in areas that saw relatively good rainfall, such as northern Illinois.
Traders will be keeping an eye this week on an annual Midwest crop tour will provide the first private, in-depth survey of corn and soybean fields.
The tour, organized by agricultural advisory firm Pro Farmer, will assess fields spanning from Ohio to South Dakota. The company will release yield and output estimates Friday based on results of the tour, along with state survey results after each day.
McCambridge said that more than the tour estimates, traders will be monitoring comments from tour participants about the crop.
Corn prices will also be supported Monday by the weaker dollar, which is supporting commodities generally, and stronger equities.
Gains are being limited by weak export demand, which analysts say shows that customers are unwilling to buy U.S. corn at prices much above $7.
On the other hand, domestic feed demand is expected to remain strong after the U.S. Department of Agriculture on Friday reported cattle placed on feedlots was again higher than expectations in July. The number of cattle placements has surged in recent months, due largely to a severe drought in the southern Plains that has scorched most of the available grazing land there.
Monday will mark the first day of an expanded 40-cent daily trading limit foir corn futures. The Commodity Futures Trading Commission approved CME Group's controversial proposal to increase the one-day trading limit for U.S. corn futures earlier this month. The old limit on one-day price moves higher or lower was 30 cents