Upward Corn Price Movement Steepened



Corn’s price trend

December corn futures were trading above the support level of $3.70 per bushel on December 3, 2015. After corn prices fell for a day, the increasing price movement steepened on the day. Prices were trading substantially above the 20-day moving average and below the 50-day and 100-day moving averages of $3.64, $3.75, and $3.77 per bushel on December 3.

The above chart suggests that corn prices might be $3.60–$3.70 per bushel in the near term.

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Price drivers

The lower-than-projected weekly export sales dragged corn prices down. With this fall, US corn exports are ~25% behind the export sales last year. Higher crops and inventory from Argentina and Brazil kept corn prices under pressure.

However, the US Dollar Index fell by 2.1% on December 3 from 13-year highs. Concerns about the dry weather conditions in the north-central region in Brazil could support corn prices.

Stocks review

Despite the progress in corn prices on December 3, 2015, corn producing and trading businesses like Archer Daniels Midland (ADM), ConAgra Foods (CAG), Bunge (BG), and CHS (CHSCP) were trading under pressure.

Bunge fell by 1.6%. It fell 2% during last five trading days. ConAgra Foods fell by 2% on December 3, 2015. It fell by 4% during last four consecutive trading days. Archer Daniels Midland fell for two consecutive trading days by 3.2%.

ETFs like the PowerShares DB Agriculture Fund ETF (DBA) rose by 1.2% after falling on December 3. CHS rose for four consecutive days by 1.2%. It rose by 0.26% on December 3.


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