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Weaker Export Inspections Push Corn Prices Down

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Dec. 4 2020, Updated 10:52 a.m. ET

Corn prices fell

Corn futures on the Chicago Board of Trade (or CBOT) for March delivery fell by 0.14% to settle at $3.69 per bushel on January 25, 2016. Corn prices fell due to a lower weekly corn export inspection report from the US Department of Agriculture. ETFs like the Teucrium Corn Fund (CORN) did not follow CBOT and increased slightly by 0.09% on January 25, 2016.

The US Department of Agriculture’s Weekly Export Inspection Report was released on January 25, 2016. Corn weekly export inspections were at 599,765 metric tons, a mere 3.1% higher from the previous week and 19.5% lower from the prior two-week average. Year-to-date corn export inspections for 2015-16 were at 11.2 million metric tons, down 21.5% from a year ago. The lower pace of the corn export inspections dragged corn prices down on January 25, 2016.

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Societe Generale published projections for US corn plantings for the marketing year 2016-17 on January 25, 2016. According to the study, corn planting in the US is projected to remain at approximately 88 million acres, which is in line with figures for the marketing year 2015-16. The institute highlighted that the returns from corn planting could outperform returns from soybean during the marketing year 2016-17. Analysts at the institute believe that corn would cover more ground than soybean during the marketing year.

The returns from the second consecutive year of corn sowing, which were lower by 10%, were also higher than soybean returns, which could increase corn planting even more. This would support the corn supply and negatively affect futures prices. The speculation of higher corn supply in the marketing year 2016-17 pushed corn prices down on January 25, 2016.

Stock discussion

The decrease in corn prices supports the share value of the businesses involved in corn trading and producing. Companies such as CHS (CHSCP), ConAgra Foods (CAG), Bunge (BG), and Archer-Daniels-Midland (ADM) dropped by 0.5%, 2.9%, 1.5%, and 2.4%, on January 25, 2016. ETFs such as the PowerShares DB Agriculture Fund (DBA) fell slightly by 0.15% on January 25, 2016, with the fall in corn prices.

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