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Corn Prices Shift to Downward Trend

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Trend for corn prices

Corn futures prices for March delivery were trading below the crucial support level of 350 cents per bushel on January 4, 2016. A downward price movement in corn futures prices since December 15, 2015, is a threat to corn producers. Prices are at the seven-month lows, leaving key moving averages substantially higher.

The chart above indicates that prices might remain in the bracket of 345 and 365 cents per bushel in the near term.

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Price drivers

Lower-than-projected corn export inspections from the US Department of Agriculture’s report, slower demand indications from the monthly Grain Crushing and Co-Product Production, and favorable weather conditions in the critical corn export region of South America kept corn prices under pressure on January 4, 2016. Prices received a boost from the appreciation of the US dollar on the day by 0.14%.

Stock review

The decline in corn prices hurts corn-producing and trading companies. On January 4, 2016, Archer-Daniels-Midland (ADM) and Bunge (BG) dropped by 2.3% and 2.1%, continuing their downward price movement for the third consecutive day. Tyson Foods (TSN) fell by 0.69% on the day, with a total fall of 1.74% during the past three days. Ingredion (INGR) fell by 3.2% on January 4, registering a total drop of 5.4%. The PowerShares DB Agriculture Fund (DBA) fell by 0.97% on January 4, 2016, after three consecutive days of price increases by 1.1%.

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