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Can the rally be sustained?

Grain and soybean markets closed higher in response to USDA’s bullish acreage report on Tuesday.  

But can the rally be sustained?

Market analyst Arlan Suderman with StoneX (formerly INTL FCStone) says July weather will be a major factor.

“Forecasts are shifting warmer and drier and today’s acreage surprises do leave a smaller margin for error if it does turn hot and dry,” Suderman says.

But he says a sustained rally will also require an increase in Chinese buying activity.

“To really tighten up these balance sheets, and especially the corn balance sheet—I cannot emphasize this enough—we’re probably going to need a combination of unanticipated Chinese demand and a significant weather event.”

Suderman made those comments during a StoneX webinar on Tuesday afternoon.