U.S. corn futures are expected to fall early Thursday as weaker-than-expected export sales weigh on prices.
Traders predict corn for December delivery, the most actively traded contract, will start down three to four cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract lost 2 3/4 cents, or 0.4%, to $6.88 3/4 a bushel.
Pushing prices lower are weekly export sales of 484,900 tons that fell short of expectations of 550,000 tons to 950,000 tons. Sales were down sharply from the 901,500 tons sold the previous week, fueling concerns about declining demand.
Buying seems to have dried up as concerns have eased about poor weather hurting U.S. output, analysts said. That reduced the sense of urgency to secure grain. Increasing grain exports from Russia and Ukraine have heightened competition for export sales to Asia, as well, they said.
"Black Sea feed wheat [is] beginning to compete with U.S. corn in some Asian markets," said Bryce Knorr, analyst for Farm Futures, an agricultural publication.
Prices for U.S. corn remain historically high, pinching buyers of the grain who remain worried hot weather will reduce output. Prices have climbed 20% from a 2 1/2-month low at the beginning of July.
The market is "on high alert" for hot weather in August after underestimating the damage heat did to the crop last summer, said Rich Feltes, vice president of research for brokerage RJ O'Brien. The concerns will support the December corn contract around $6.60 a bushel, which is "high enough to keep Chinese buying sidelined but not high enough to choke off ethanol demand," he said. China made large purchases of corn after prices dropped earlier this month, boosting U.S. sales and prices.
In the near term, weather conditions look favorable for corn in the western Midwest. Scattered showers will continue to favor crop areas from Nebraska, Iowa and northern Illinois northward, while areas to the south will get less rain and experience hotter temperatures, according to private weather firm Telvent DTN.