Corn Prices Continue to Fall


Dec. 18 2015, Published 10:02 a.m. ET

Trend in corn prices

Corn futures contracts for March expiry were trading marginally below the key support level of $3.75 per bushel on December 17, 2015. The prices recorded a lower day high and lower day low despite a significant rise in the day closing prices for the third consecutive day. It suggests that corn could progress more due to the downward price movement. Prices traded slightly above the 20-day moving average of $3.73 per bushel on December 17, 2015.

The above price chart shows that corn could be $3.60–$3.80 per bushel in the near term.

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Price drivers

Speculation of extended unfavorably dry weather conditions in the crucial corn producing regions in Brazil has a negative impact on the corn supply. It reduced US corn export competition and boosted futures prices on December 17, 2015.

The lower-than-projected corn export sales sentiment on December 17, 2015, hurt the corn export sentiment on December 17, 2015. Informa Economics reported a reduction in the corn planting estimation. This hurt the US corn supply sentiment. The US Dollar Index appreciated by 0.66% on December 17, 2015. This had a negative impact on corn exports. US exporters would lose due to the rising US dollar.

Stocks review

The rise in corn prices came with a rise in the shares of producing and trading businesses. Bunge (BG) rose by 1.4% for the third trading day on December 17, 2015. It rose by 3.6% in three trading days. Archer Daniels Midland (ADM) and ConAgra Foods (CAG) fell by 3.1% and 0.39% on December 17, 2015. This put an end to a two-day price rise by 3.6% and 3.8%, respectively. Tyson Foods (TSN) fell for second trading day. It fell by 1.80% on December 17, 2015.

ETFs like the PowerShares DB Agriculture Fund ETF (DBA) fell by 0.25% on December 17, 2015. It fell for the fifth trading day. It fell by 2.2% in five trading days.


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