There are many factors playing into the grain markets right now. Demand from China, Weather for harvest, final yield estimates, and as always, the technical action on the charts. Something else to consider, is when will producers step in to begin locking in these higher prices?
Demand from China continues to ramp up as there were more sales announcements this morning to China, 132,000 tonnes. Of course, this is going to continue to give support to the markets if China does not let up on buying US soybeans. A couple bearish factors moving forward will be the charts, and what seems to be ideal harvest weather in the next 6-10 days. Technically speaking, the corn and bean markets are reaching “extreme” overbought levels with RSI (relative strength index) reaching into the 90’s, which is pretty rare. On top of the charts desperately needing a correction, the harvest window of weather is pretty much wide open. There shouldn’t be many, if any, delays this week with harvest. Typically, this is the time of year where grain markets see “harvest pressure” as traders start to see the actual crop sizes and estimates becoming actual yields.
Overall, this week I would expect to see the grains being pressured, despite the demand from China. Keep an eye out for producer selling, RSI levels needing to come down and then any changes in weather for this years harvest. Those should be the main factors moving the market this week.
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