Corn Prices Trade below the Key Moving Averages



Trend for corn prices

Corn futures contracts, for March expiry, were trading above the key support level of $3.55 per bushel on January 14, 2016. Prices held the level from the previous day despite significant pressure due to higher supply on the day. The open interest and volume of the contracts fell by 1.1% and 24% on January 14, 2016. It fell by 3.2% for the second trading day and 45.7% during the period. The 20-day, 50-day, and 100-day moving averages of $3.61, $3.68, and $3.80 per bushel are higher than the current futures prices.

The above chart shows that prices could be $3.50–$3.65 per bushel in the short term.

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Price drivers

The rise in the U.S. Department of Agriculture’s week-over-week export sales supported corn prices on January 14, 2016.

Supportive weather conditions and a higher output projection from Argentina kept corn prices under pressure on January 14, 2016. The US dollar appreciated on the day by 0.18%. It hurt the export sentiment and futures prices.

Stocks review

The advance in corn prices supports corn trading and farming businesses because the price of their inventories increases. On January 14, 2016, corn prices were under pressure due to the huge supply that dragged companies’ prices. Archer Daniels Midland (ADM) and Tyson Foods (TSN) fell by 0.33% and 0.47% for the consecutive second trading day on January 14. They fell by 2.7% and 1.3%, respectively, during the period. The gradual downward movement in CHS (CHSCP) continued for the sixth consecutive day. It fell by 0.30%. It fell by 2.6% during the period. Bunge (BG) fell by 1.4% on January 14, 2016. It fell by 3.8% in the previous six-day downward price movement. The PowerShares DB Agriculture Fund (DBA) fell by 0.05% on January 14 after rising by 0.86% for two consecutive days.


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