Spill over selling continued again today in corn, which helped to post new contract lows. Soybeans consolidated within Friday's range on Monday as supply bears and demand bulls continued to do battle. Wheat saw another negative day as new lows were made again.
The macro story for price action in soybeans appears to be developing bullish potential. The high in 2012 was an “upthrust position,” which ended the bull market that started in late 2008 and early 2009. The decline/bear market,” from the high in 2012 ended the downtrend in 2015 with a spring.
As is the case every July, U.S. weather played the dominant role in agricultural futures markets this month. For the corn belt, it was a very good month; it was the fifth rainiest July in the past 121 years and temperatures were exactly in line with the long term averages. Not surprisingly, many have started to discuss record yields for corn and soybeans. We believe that is a reasonable assumption for corn, but a bit premature for soybeans.