Weekly grain report

Focus: Soybeans

 

Despite the early concerns over heavy spring rains and flooding in the grain belt, the U . S . Department of Agriculture recently raised its forecast for this year’s corn and soybean harvest. The corn yield is expected to be 154 bushels per acre , which would be the second highest recorded yield ever. The government’s soybean forecast was also raised by 2%. The higher yields are coming at a time when prices have been falling. For example, soybeans experienced a dramatic 83% rise in prices beginning in June of 2007 (see chart). Bearish ADX divergence was clearly present in the weekly chart of soybeans before the subsequent decline. After a peak of 1642 in July of 2008, prices have fallen dramatically and are now back to the 2007 breakout levels (910), completing the bull cycle.

Chart Courtesy of TradeStation

 

Dr. Charles