Would an Early Harvest Impact the Volatility in Corn Prices?


Oct. 30 2015, Updated 9:11 a.m. ET

Trend channel

The December CBOT (Chicago Board of Trade) corn futures prices were near the key support level of 375 cents per bushel on October 28, 2015. Corn futures prices have shown more volatility since the upward price trend on October 16, 2015. Sluggish exports and a firm hold by the producers might increase the sensitivity of the corn prices before the harvest is completed.

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What factors are driving the prices?

The drought situation in the South African region has affected the corn crop. This could provide an opportunity for US exporters to realize the price benefit. The precipitation in the US Midwest might hinder the harvest activity. If the harvest is delayed due to the rain, it has a negative impact on the quality of the corn. It would negatively impact the supply and support the corn prices.

However, favorable rainy weather in South America and the competition might support the supply sentiment. It could have a negative impact on corn futures prices. The strengthening US dollar could have a negative impact of corn exports and corn prices.

For corn futures prices, the pulling and pushing factors are strong. Therefore, the anticipated volatility in corn futures prices might increase. The corn prices might fluctuate in the range of 375 cents to 390 cents.

Food business stocks

Bunge (BG) stock prices continued its two-day fall on October 28, 2015. ConAgra Foods (CAG) also continued to fall from the previous day’s trend. Archer Daniel Midland (ADM) and Tyson Foods (TSN) stock prices rose on October 28 after falling for two consecutive days. The Power Shares DB Agriculture ETF (DBA) also rose on October 28.


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