Corn Traded below Crucial Moving Averages for 12th Straight Day


Mar. 10 2016, Published 2:08 p.m. ET

Corn price trend

Corn futures prices rose by 1.3% during the four straight days of increasing price movement with a 0.07% increase on March 9, 2016. Prices traded closer to the resistance of 360 cents on the day. Volume increased by 46.1% and the previous day’s open interest fell by 14.6% on March 9. Prices are trading near the 20-day moving average but failed to climb above it. Analysts have a downward projection but in the current trading range.

The chart indicates that corn prices could continue to trade in the range of 350 and 360 cents per bushel for the near-term period.

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Price drivers

Despite the fall in ethanol production, the rise in the weekly US ending Fuel Ethanol Stock from the US Energy Information Administration’s report hurt the prospects of corn demand, as corn is the key input for the production of ethanol. Corn futures prices rose on March 9 despite low enthusiasm and activity from the March 2016 WASDE report. Potential sowing projections from the weather change in the US Midwest and Delta regions failed to influence the market activity on the day. The US dollar depreciated by 0.01% on March 9 and supported the export sentiments on the day.

Stock review

The improvement in corn prices supports the inventory value of the companies in the corn trading and producing domain. On March 9, 2016, share prices of Ingredion (INGR) and ConAgra Foods (CAG) both rose by 1.1% after two consecutive trading days of falling. These shares have fallen by 0.99% and 13.2%, respectively, in the past two days. Tyson Foods (TSN) rose by 0.95%, recovering from the previous day’s drop of 0.34% on March 9, 2016, with the increase in corn prices. CHS (CHSCP) continued to rise for the fourth straight day. It rose by 2.3% during the period. The PowerShares DB Agriculture Fund (DBA) advanced by 0.10% on March 9 with the rising corn prices for the second consecutive trading day.


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