Corn Prices Are Trading close to Support Level



Trend in corn prices

Corn futures contracts for March delivery were trading below the crucial support level of 375 for the second consecutive day on December 18, 2015. Amid the volatile price movement on the day, corn day-high prices traded near the key support level of 380 cents per bushel. The volatile price movement in the near term could attract speculative interests. Corn prices were trading marginally above the 20-day key moving average of 373 cents per bushel on December 18, 2015.

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

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Price drivers

The speculation of unfavorable Brazilian weather boosted corn prices on December 18, 2015. Extended dry climatic conditions could stress corn plants and hurt the corn output sentiment further. The petition regarding allegations of dumping US corn could affect US corn exports to China. The depreciation in the US dollar index by 0.30% on December 18, 2015, could support US corn, as a lower US dollar makes US goods cheaper for exports.

Stock review

On December 18, 2015, corn traders and producers rose due to improvements in corn prices. Bunge (BG) rose by 3.2% while Archer-Daniels-Midland (ADM) rose by 2.1% on December 18, recovering from the previous day’s fall of 3.1%. However, Tyson Foods (TSN) and ConAgra Foods (CAG) dropped by 0.59% and 0.12% on December 18, 2015. The stocks fell by 2.5% and 0.52% during the period. After five consecutive trading days of falls, the PowerShares DB Agriculture ETF rose 1.1% on December 18, 2015.


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