Corn Prices Are below Key Moving Averages


Dec. 17 2015, Published 1:34 p.m. ET

Trend in corn prices

March corn futures prices were trading below the key support level of 370 cents per bushel on December 16, 2015. Corn prices lost the key support level of their 20-day moving average of 373 cents per bushel with a 2% fall on December 16, 2015.

The price chart suggests that corn prices may oscillate in the range of 365 and 375 cents per bushel in the short run.

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Price drivers

The US EIA’s (or Energy Information Administration) higher-than-consensus ethanol inventory report dragged corn prices down on December 16, 2015. Projected tax benefits for US corn producers substantially increased corn sales. With the slight appreciation in the US dollar by 0.20% on December 16, 2015, corn export sentiment was also hurt as the higher US dollar makes US goods costly. Domestic strong demand would support the corn prices in the near term.

Stock review

The fall in corn prices brought negative price change in food businesses such as Tyson Foods (TSN), which dropped slightly by 0.17% on December 16, 2015. On the other hand, Archer-Daniels-Midland (ADM), ConAgra Foods (CAG), and CHS (CHSCP) increased by 1.6%, 3.0%, and 0.46%, respectively. These stocks registered a rise of 3.6%, 3.8%, and 3.4%, respectively, over the past two days. The PowerShares DB Agriculture Fund ETF (DBA) continued to drop on the fourth consecutive day by 0.79% with a total fall of 2.0%.


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