Grain Markets Push New Highs Amid Technical Overextension

Grain markets are continuing to push new highs, with December Corn futures rising another 1% overnight to reach $530. The gain is partly due to wheat futures increasing by around 15 cents. Analysts had pointed out that a late-day weakness in oil prices might drag on corn prices, but the correlation between the two has decreased significantly.

The market's recent strength can be attributed to the fact that it had been underpricing upside risks for several months. Corn futures have made up for lost time, posting their fifth straight day of gains and eight out of the last ten days higher. However, technical indicators suggest that prices are technically overextended in the near term.

The Relative Strength Index (RSI) has reached 75.88, its highest level since March. This has led some to caution against irrational exuberance and recommend using options spreads as a way to protect long exposure or play for a retracement.