-U.S. corn futures are expected to start stronger Tuesday on expectations that cool, wet weather will disrupt plantings.
Traders and analysts predict corn for July delivery, the most-actively traded contract, will start 3 to 5 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract rose 2 3/4 cents, or 0.4%, to $7.62 1/4 a bushel.
Concerns about poor weather delaying planting are pushing prices higher because the country needs to sow and harvest a large crop to replenish low inventories. Supplies are expected to reach a 15-year low ahead of harvest next fall due to strong global demand.
Early planting is off to a sluggish start, with 7% of the crop sown as of Sunday, one percentage point behind the average for that time of year, according to the U.S. Department of Agriculture. Farmers will struggle to make significant progress this week, meteorologists said, as conditions are expected to remain soggy.
"Episodes of rain, thunderstorms and even snow will keep spring field work and early planting slow during this week," said Joel Burgio, senior agricultural meteorologist for Telvent DTN, a private weather firm.
Worries about the weather are keeping traders on edge and supporting deferred futures contracts after the front-month contract recently stormed to a record high. Nearby futures have more than doubled since last summer on strong demand from foreign buyers, record U.S. ethanol output and steady buying by domestic livestock producers.
Traders are shifting their focus to concerns about planting from fears about demand draining supplies from the previous harvest. The USDA said Iowa's crop was 2% planted, below the five-year average of 6%, while Indiana's crop was 2% sown, below its five-year average of 4%.
"The problem for corn and the other crops is that rain has been more than abundant," said Dennis Gartman, publisher of the Gartman Letter, a financial newsletter.
In other news, China, the world's second-largest corn consumer, will limit corn consumption in non-feed sectors to ensure supply for animal feed mills and help control prices, according to corn traders and local media reports. Beijing has asked banks to halt loans to companies, excluding state stockpiling agencies, that would use the money for non-feed processing purposes, such as the production of sweeteners or alcohol.
It's uncertain how many bushels the policy will keep in storage. Yet, the move suggests China, which is suspected to have bought a large amount of U.S. corn last month, is worried about tight global inventories, analysts said.
--Chuin-Wei Yap in Beijing contributed to this report.