MUMBAI, Aug 5 (Reuters) - Corn futures in India are expected to trade lower this week due to expectations of higher output as farmers expanded the area under cultivation and on weak overseas demand, though some short-covering could aid prices at lower levels.
Early and abundant rains have helped Indian farmers expand the area under cultivation. Corn was sown on 7.49 million hectares as of Aug 1, up from 6.29 million hectares a year earlier, farm ministry data showed.
"The overall trend in corn looks weak because of an increase in the seeded area. Exports are also weak," said Prerana Desai, vice-president of research at Kotak Commodities.
"Sell on rallies would be the recommendation for this week," Desai said.
Corn is cultivated during both summer and winter in India, Asia's largest exporter of the grain, with the major contribution coming from the summer crop.
Traders said overseas demand has come down due to less quality supply as there's more moisture content due to the rains.
Heavy rains in some corn cultivating pockets has also aroused concerns about output and quality.
"Some areas have received excess rains this season and this could hit quality, but we will have to watch rain patterns for some more time to reach any conclusion," said a trader from Nizamabad in Andhra Pradesh state.
The key September contract for maize rabi on the National Commodity and Derivatives Exchange ended 1.67 percent higher at 1,275 rupees per 100 kg ($5.37 per bushel). It has fallen about 13 percent since the close on June 22.
India raised the support price for the 2013/14 summer crops on June 27. The support price for corn was raised by 135 rupees to 1,310 rupees per 100 kg.
The Chicago Board of Trade new-crop December corn was down 1.13 percent at $4.58-1/2 a bushel at 1254 GMT.
Chicago corn prices lost more ground on Monday to set new lows since late 2010, as crop-friendly weather across the U.S. Midwest buttressed expectations of a bumper corn harvest.
$1 = 60.9100 Indian rupees Reporting by Meenakshi Sharma; Editing by Prateek Chatterjee