Range-Bound Projections Prevailed for Corn Prices
Grain Prices Didn't Get Support from Strong Domestic Demand
Trend for corn prices
March corn futures contracts were trading near the crucial support of $3.70 per bushel on February 1, 2016. Prices continued to fall. However, prices continue to remain in analysts’ range-bound expectations due to technical support at this level. The volume fell by 35.6% after rising for four consecutive days. The open interest fell by 0.57% for the second consecutive day. Prices continued to trade above the 20-day and 50-day moving averages of $3.62 and $3.67 per bushel on February 1, 2016.
The above chart shows that prices could be $3.60–$3.75 per bushel in the near term.
Price drivers
The U.S. Department of Agriculture’s Grains Crushing and Co-Product’s report for December 2015 supported the domestic corn demand with higher monthly consumption on February 1, 2016. Higher rate expectations from producers had a negative impact on corn supplies on February 1. It supported the prices. The US Dollar Index fell by 0.5% on February 1, 2016. It supported the export sentiment and prices on the day. Despite favorable cues, corn prices fell on the day.
Stocks review
Corn producing and trading businesses decline with the fall in corn prices. On February 1, 2016, Bunge (BG) fell by 1.24% due to the fall in corn prices. It fell after rising by 5.8% for two consecutive days. In contrast, Archer Daniels Midland (ADM) and ConAgra Foods (CAG) rose by 0.31% and 0.82%, respectively, for the fifth and third consecutive trading day. These shares rose by 9.3% and 6.7% during the period. CHS (CHSCP) continued the rising price movement after falling for a single day. It rose by 0.81% on February 1, 2016. The PowerShares DB Agriculture Fund (DBA) rose by 0.45% on February 1, 2016. It ended a downward price movement by 0.70% for three consecutive days.
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