Traders predict Chicago Board of Trade futures will open 4 cents to 6 cents lower. In overnight trade, corn for September delivery was down 6 1/2 cents to $6.75 3/4 per bushel and December corn slipped 6 cents to $6.80 1/4.
The market has little apparent reason to climb early Friday as anxiety over Congress’ inability to reach an agreement on raising the debt ceiling has fueled worries about the global economy, and a broader sell-off that would impact commodities.
"We’re just gun-shy that the market is going to collapse in two seconds," said Jerry Gidel, analyst with North America Risk Management Services.
The broader economic concerns are overshadowing supply and demand fundamentals, but traders are also watching U.S. crop development closely, as the weather–hot and dry in many areas, while excessively wet in the far northwest corn belt–has fueled anxiety about a shortfall.
Northern Illinois was hard-hit by rains overnight, and weather has been more favorable in many areas in recent days after last week’s intense heat wave. Traders are also watching whether areas further south, toward Peoria, are going to receive much-needed rain.
Analysts mostly expect that the national average yield will be below the USDA’s most recent estimate of 158.7 bushels per acre.
"Grain markets, corn in particular, may be stuck until we know more about the crop," MF Global broker Joseph Vaclavik said in a report to clients.
Meteorlogix said in a forecast that areas of the northern corn belt will be mostly dry Friday and Saturday, while southern areas could see scattered showers and thunderstorms. That would be beneficial to the crop, although analysts note that longer-range forecasts call for a return of intense heat in southern areas.
In export news, the International Grains Council Friday revised upward its forecast for China’s corn imports in the year to June 30, 2012 by 50%.
China’s corn imports are forecast to increase to 3.0 million tons in 2011-12 from 1.7 million tons a year earlier due to strengthening demand, tight local supplies and prices as well as high domestic transportation costs, the IGC said.
Many analysts expect China to import 5 million tons or more. The USDA most recently projected imports of 2 million.
Due to the increased Chinese demand, the IGC also revised upward its U.S. corn export forecast for 2011-12 by 500,000 tons to 49 million tons.