Why Corn Prices Might Test the 100-Day Moving Average



Corn price trend

December corn futures prices were trading near the crucial support level of 370 cents on December 8, 2015. Prices were trading below 50-day and 100-day moving averages of 374 and 375 cents per bushel on December 8, 2015. Corn prices are still near the 100-day moving averages. The short-term catalyst is the December World Agriculture Supply and Demand Estimation Report.

The chart indicates that corn could fluctuate between 365 to 380 cents per bushel in the short term.

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Price drivers

Depreciation in the US dollar index by 0.30% on December 8, 2015, supported corn prices. The analyst consensus was that producers would be forced to sell some of their corn to meet their immediate cash requirement amid falling farm incomes.

However, a significant increase in corn production from China and excess supply sentiment in part as a result of Argentina’s expected export policy change supported the corn supply sentiment on December 8, 2015.

Stock review

The rise in corn prices strengthened corn producers and traders on December 8, 2015. On December 8, Tyson Foods (TSN) rose by 1.6%. CHS (CHSCP) rose by 0.19%, continuing its upward price trend for the sixth consecutive day. Archer-Daniels-Midland (ADM) and ConAgra Foods (CAG) fell by 0.40% and 0.52%, respectively, on the day. The PowerShares DB Agriculture Fund ETF (DBA) fell by 0.77%.


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