U.S. corn futures are expected to open higher Tuesday after a government report showed crop conditions are deteriorating more than expected.

Futures at the Chicago Board of Trade are expected to open 3 cents to 5 cents higher. In overnight trade, corn for September delivery was up 4 3/4 cents to $7.25 1/4 per bushel. December corn, the most active contract, was up 4 1/4 cents to $7.38 3/4.

The portion of the U.S. crop rated good or excellent fell to 57%, down 3 percentage points from the prior week, according to the U.S. Department of Agriculture's weekly crop progress report. Traders were expecting a decline of just one or two percentage points.

The decline reflects a hot, dry summer that has hurt the crop in much of the heart of the Corn Belt, particularly Illinois. The weekly decline solidifies "ideas that USDA will further cut their estimate of U.S. summer row crops in its September crop forecast," Ag Resource Co. said in a morning report to clients.

Corn prices also should be supported by outside markets, including a weaker dollar and firm equities, analysts said.

After an initial climb Tuesday, traders' attention could turn to reports of early harvesting in the south, as well as feedback from the Pro Farmer Midwest crop tour, said Mike Zuzolo, president of Global Commodity Analytics and Consulting. The crop tour, which is sending scouts through Indiana, Illinois and Nebraska on Tuesday, reported Monday an average Ohio yield of 156.3 bushels per acre, down from its survey projection last year of 165.6. South Dakota projected yields were also down, slightly.

While demand, particularly for exports, has been lackluster in the face of historically high prices, Zuzolo said there are still plenty of potential corn buyers. He noted that the number of cattle on feed is much higher than it was a year ago.

"The demand is there," Zuzolo said. "The question is, 'where do they step in and buy it?'"

Elsewhere, Japan has yet to purchase around 60% of its feed corn import requirements for the October-December period, and buyers are awaiting a downward correction in prices, trading executives said Tuesday.

Japan's purchases are closely watched by traders as it is the world's largest importer of corn, buying around 3.2 million metric tons of feed-grade quality grain each quarter.

Japan has so far purchased around 1.3 million metric tons of feed corn for shipment in the fourth quarter, the executives said.