U.S. corn futures are expected to rise early Wednesday on increasing projections that plantings will fall short of expectations because of poor weather.
Traders predict corn for July delivery, the most actively traded contract, will start 5 cents to 7 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 6 3/4 cents to $7.27 a bushel.
Prices strengthened on expectations that farmers won't sow all the acres they intended with corn because cool, rainy weather has delayed plantings. Farmers don't want to plant corn late, if they can avoid it, because late-planted crops often produce lower yields. Farmers will likely switch some corn acres to other crops, such as soybeans, or cash in on crop insurance because weather prevented them from planting.
Market participants are "now anticipating reduced corn acres as some are switched to beans and some are abandoned," said Doug Berman, a broker for MF Global.
Grain users are nervous about the potential for reduced plantings because farmers need to harvest a big crop next fall to rebuild inventories, which are projected to reach a 15-year low. Corn futures are down about 7% from a record high reached last month on concerns about strong demand draining low supplies.
Conditions don't look favorable for advancing planting in the coming week. Ohio, North Dakota and South Dakota are "major areas" that could see reduced plantings because of persistent rains, Berman said.
As of Sunday, 63% of the nation's corn was planted, behind the five-year average of 75% for that time of year, according to federal data. Farmers had planted just 7% of the corn crop in Ohio, below the average of 70% for that time of year, and 14% of the crop in North Dakota, behind the average of 55%.
"Farmers in Ohio have an extraordinarily high amount of corn to put in the ground given the date on the calendar," said meteorologists at Freese-Notis Weather, a private forecaster. "It is very likely that we will see very little get done this week and the forecast is not holding out a lot of hope for next week either."
At least 80% of the corn in Ohio may still need to be planted by May 29, according to Freese-Notis. Progress is "not going to be a lot better for Indiana and Michigan," as the states also are expected to see rain, the firm said.
"There is enough rain in the forecast to believe that very little fieldwork will get done really anywhere in the Corn Belt next week," according to Freese-Notis.
Many analysts said it's unlikely farmers will sow the 92.2 million acres of corn the U.S. Department of Agriculture predicted would be planted in a report issued in March. The government will update its planting forecast in June.