U.S. corn futures are expected to start mixed Tuesday as forecasts for favorable crop weather weigh on deferred contract months.
Traders predict corn for July delivery, the nearby and most actively traded contract, will start up 1 cent to 2 cents a bushel. Corn for December delivery, which represents the crop that will be harvested next fall, is expected to start 2 cents to 4 cents a bushel lower. In overnight electronic trading, July corn rose 1 1/2 cents, or 0.2%, to $7.60 a bushel, while December corn dropped 4 1/4 cents, or 0.6%, to $6.79 3/4 a bushel at the Chicago Board of Trade.
Supportive signals from external markets are expected to support the nearby contract, as crude oil prices are higher and the U.S. dollar is weaker. The grains are linked to crude oil because ethanol is made from corn. A softer dollar makes U.S. commodities more attractive to foreign buyers.
Yet, deferred contract months will feel pressure from expectations that warm, dry weather in the Midwest will help farmers finish planting corn and encourage early development of the recently seeded crop, traders said. Planting earlier this spring was seriously delayed by cool, wet conditions.
Areas that still need to plant corn in the eastern Midwest, including parts of Indiana and Ohio, will dry up during the next 10 days, according to meteorologists for Freese-Notis Weather, a private forecaster. Warm temperatures during next ten days will allow recently seeded crops to "put on a lot of early growth," they said.
Conditions remain unfavorable in the northern U.S. Plains, where farmers are struggling to plant corn and spring wheat. Episodes of scattered rain or thunderstorms will "likely slow field work and planting," according to Telvent DTN, a private weather firm.
The U.S. Department of Agriculture will release an update on planting progress in a weekly crop report at 4 p.m. EDT. Planting is expected to be about 90% to 94% complete, up from 79% last week. The government also is expected to issue its first ratings on the condition of the crop.