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How Are Corn Prices Trending?

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Trend for corn prices

March corn prices on the Chicago Board of Trade (or CBOT) fell on February 18, 2016, and were trading near the key support level of 365 cents per bushel. Volumes rose 46.2% and open interests dropped by 6.8% on the day. With this decline, prices traded below the crucial 20-day and 50-day moving averages on February 18, 2016.

The chart indicates that prices might remain in the bracket of 355 and 370 cents per bushel in the near term.

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Price drivers

Stronger weekly US EIA ethanol production and fuel ethanol inventory reports hurt the corn demand sentiments for the near term on February 18. Weaker-than-estimated corn crop production estimates from the Buenos Aires Grains Exchange supported the US corn export sentiment on February 18. The US dollar depreciated by 0.03% on the day and boosted the corn export cues.

Stock discussion

The drop in corn prices hurts the stock values of companies engaged in the corn trading and producing businesses. However, contrary to expectations, Ingredion (INGR) rose by 1.1% on February 18. Over the past three days, the stock has risen by 4.9%. CHS (CHSCP) and ConAgra Foods (CAG) rose by 0.14% and 0.26%, respectively. Archer-Daniels-Midland (ADM) rose by 1.5% on February 18, recovering from the previous day’s drop of 0.68%. The PowerShares DB Commodity Index Tracking Fund (DBC) fell by 0.55% on February 18.

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