Signs of a Top?

While there is a solid foundation of rising demand and the necessity for expanding acreage, there can also be no argument that the speculative investment community has helped to exaggerate price strength trends during the past several months.

At some point, this exaggeration must face a notable correction event. For soybeans, they have had a 13 out of 14 week rally event. Anyone who studies historical tendencies in the commodity industry knows that to bet such a streak will continue at this pace is a long shot.

Today we see crude oil prices down nearly $3. We had reversal-down activity in corn and wheat yesterday. We experienced declining open interest in the soybean market during the past two rally sessions and are amid extreme extended technical conditions. Overnight corn values are at the mid-point of trade parameters established during the past 3 weeks, with this occurring after testing the topside of the trading range yesterday and ending with reversal-down activity. The US and therefore the global economy at minimum has notable warning signs. The US $ Index is beginning to show what may be a "carving of a bottom" price pattern.

End-of-the-year factors can always create its own influence on the price discovery process.

Today will be a key day for the grains, as it may not take much perception of follow-through weakness to trigger liquidation desires and technical signals that could easily and quickly spur more liquidation activity.