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Corn Prices Shift to Upward Price Movement

Sean Brown

Why Did Strong Weekly Export Sales Drive Grain Prices?

Trend in corn prices

March corn futures prices were trading above the crucial support of $3.60 on March 10, 2016. Corn prices rose for the fifth consecutive trading day by ~1%. The volume fell by 55.7%. The open interest from the previous day fell by 33.2% on March 10. With the rise in corn, prices traded above the 20-day and 50-day moving averages after 12 days. The prices formed the upward channel. They shifted from the range-bound expectations. Analysts think that corn prices might correct in the near term.

The above chart shows that prices could continue to trade at $3.55–$3.65 cents per bushel in the near term.

Price drivers

Stronger weekly export sales from the USDA (U.S. Department of Agriculture) supported the export demand prospects on March 10, 2016. The US dollar depreciated by 1% on March 10, 2016. It supported corn exports on March 10.

Despite corn production rising by 180,000 metric tons, the projection was lower than the USDA’s World Agricultural Supply and Demand Estimates report. It failed to influence corn prices on March 10.

Stocks review

The rise in corn boosts the share values of corn trading and producing companies. Businesses such as Ingredion (INGR) and ConAgra Foods (CAG) increased with the rise in corn prices. They rose by 0.39% and 0.35%. They continued the rising price movement for the second consecutive trading day on March 10, 2016. However, Campbell Soup (CPB) and Dean Foods (DF) lost the benefit from the previous day. They fell by 0.25% and 0.62% on March 10. The PowerShares DB Agriculture Fund (DBA) rose by 0.93% on March 10 for the third consecutive trading day. It rose by 1.4% during the period.

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