U.S. corn futures are expected to open lower Thursday after the threat of an overnight frost appeared less severe than expected.

Chicago Board of Trade futures are called 3 to 5 cents lower. In overnight trade, corn for September delivery was down 5 cents to $7.19 1/4 per bushel while December corn was down 5 1/4 cents to $7.32 3/4.

The market has been in retreat throughout September, with the December contract down from an Aug. 29 intraday high of $7.79. Questionable demand, anecdotal reports of better-than-expected yields and a reluctance of end-users to buy at historically high levels have weighed on the market.

Worries this week that a frost or freeze would damage crops in Minnesota and the Dakotas Thursday morning have underpinned prices, but might be overblown, analysts said.

"It appears that the frost event was more hype than fact," Country Hedging analyst Joe Barker said in a morning report.

Overnight temperatures in Minnesota, while below freezing in many areas, were not nearly as cold as first feared, Linn Group analyst Jim Riley said.

Demand worries have also weighed on the market. Riley said the U.S. Department of Agriculture "fired the first shot across the bough" on Monday, when it slashed projected usage for feed, export and ethanol.

The weaker demand would be a symptom of higher prices. But Riley said some buyers are also on the sidelines because they think prices could fall further.

"I think a lot of end-users are worried about 2008," Riley said. Corn prices spiked to record highs that summer, only to retreat sharply throughout the fall, leaving many buyers with overpriced grain.

The ongoing harvest is adding seasonal pressure to prices, which typically decline as farmers push more grain into the supply pipeline.

Despite the demand concerns, weekly export sales Thursday topped expectations. The USDA reported net sales of 1.17 million metric tons for all crop marketing years, beating analyst guesses of between 400,000 and 700,000 tons. Sales totaled 870,600 tons the prior week.

The USDA's Farm Service Agency is slated to update estimates Thursday for how many acres farmers were unable to plant due to poor conditions. The data could give an indication of how the USDA will adjust its harvest estimate in a monthly crop report in October.