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Why Did Corn Prices Trade near the Crucial Resistance of $3.6?

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Trend in corn prices

Corn futures prices rose for the third consecutive trading day on March 8, 2016. It was trading near the resistance level of $3.60 per bushel on the day. The prices were able to gain support and rise above the level. However, the prices fell at the end of the day. The volume rose by 1.7%. The open interest for the previous day fell by 44.5% on March 8. The prices were stronger before the WASDE (World Agricultural Supply and Demand Estimates) report. However, corn prices were trading below the 20-day simple moving average.

 

The above chart shows that corn prices could be $3.50–$3.60 per bushel in the short term.

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Price drivers

Weaker corn import projections for 2016–2017 negatively impacted US corn export prospects on March 8. The speculation of stronger supply projections for the WASDE report dragged corn futures prices down. The US dollar appreciated by 0.05% on March 8, 2016. It hurt the export prospects. Despite these factors pulling prices down, corn increased on the day.

Stocks review

Rising corn prices help increase the stock values of companies in the corn producing and trading business. On March 8, 2016, the share prices of CHS (CHSCP) rose by 0.42% for the third consecutive trading day. It rose by 2.1% during the period. The share values of Campbell Soup (CPB) rose for the fifth consecutive trading day by 0.74% on March 8. During the period, the stock rose by 2.3%. In contrast, the share prices of Dean Foods (DF) fell by 0.15% on March 8 after  rising by 1.2% for two consecutive trading days. However, Ingredion (INGR) fell for the second straight trading day on March 8 with the increase in corn prices. The PowerShares DB Agriculture Fund (DBA) rose by 0.34% on March 8 after corn prices fell the previous day.

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