Profit-taking and pressure from weak external markets are expected to push U.S. corn futures lower Thursday.
Traders predict corn for December delivery, the most actively traded contract, will start down 8 cents to 10 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract dropped 9 cents, or 1.2%, to $7.16 1/2 a bushel.
Losses in equities and crude oil should set a negative tone for the grain markets amid a lack of supportive news for corn prices, traders said. Oil is linked to the grain markets because ethanol is made from corn.
"Weakness in Dow Jones futures and crude oil and strength in the dollar overnight will be bearish influences," wrote analysts for Doane Advisory Services, an agricultural advisory firm in St. Louis.
The setback in corn will come after the nearby September contract touched a four-week high Wednesday and the most-active December contract reached a new contract high. Prices closed slightly lower Wednesday in a turnaround from the gains, and traders are expected to continue booking profits following the run-up.
Export demand won't lend much support to the market, as sales have slowed due to the recent jump in prices, traders said. The U.S. Department of Agriculture reported export sales for the week ended Aug. 11 were 523,800 tons, below traders' expectations for sales of 600,000 tons to 1.25 million tons.
Foreign buyers are holding off on purchases because they expect prices will drop once harvest begins next month, traders said. Prices have pulled back 12% since reaching an all-time high in June.