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Corn Prices Stayed above Crucial Support

Sean Brown

Here's What Really Drove Grain Prices on March 1

(Continued from Prior Part)

Corn trends as of March 1

On March 1, March 2016 corn futures contracts were trading near the crucial support level of $3.55 per bushel after five days of downward movement. Prices stayed above the key support level, however, while volumes declined by 51.1%, and open interest dropped by 32.5% on the day. Prices continued to trade below the 20-day, 50-day, and 100-day moving averages, on March 1.

Price drivers and stock review

While a weak grain crushing report (see Part 1 of this series) negatively affected domestic corn demand and dragged corn prices down on March 1, the US dollar appreciated by 0.15%, further negatively affecting corn export sentiments on the day.

This increase in corn prices supports the inventory value of businesses in corn trading and production. Tyson Foods (TSN) and Bunge (BG) advanced by 1.3% and 0.56%, respectively, after two consecutive days of corn price declines (first by 2.6% and then by 2.5%). Meanwhile, Archer Daniel Midlands (ADM) increased by 1.5% on March 1 and continued the rising price movement on the straight fifth trading day, and ConAgra Foods (CAG) increased by 1.1% on March 1, after a two-day drop of 0.99%. The PowerShares DB Agriculture Fund (DBA) fell slightly by 0.25% on March 1, 2016.

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