TOO MUCH RAIN AND NOT ENOUGH SUN

Corn and soybeans - It never rains but it pours goes the old maxim. It's certainly not our idea of a great summer vacation, but as we spelled out in Monday's Daily Jurojin, it certainly can make for swell conditions for soybeans!

The trading session closed with losses for the November contract, which was lower by 6.25 cents at $9.0875 per bushel. The cause of the back-to-back decline is once again a weather forecast reminding traders that supply is due to be plentiful as soil conditions receive a well-earned make over from above average rainfall across the Midwest.

August is the time of year when yields are dictated by the weather conditions and a nice amount of rain while help lift yields to pad out the crop. Last week the Department of Agriculture rated the crop condition in the nation's top 18-producing states as above normal and the best in five years. We think the conditions for soybean could further hamper prices in the next couple of weeks.

Corn on the other hand is apparently more susceptible to loss of yield due to frost damage later this year after the coldest July in fifty years. Over the past month the average Midwest temperature had been 8 degrees Fahrenheit below normal. Unlike soybeans, the crop condition observed by the USDA was worse compared to the crop this time last year.

So it looks like the spread between corn and soybeans might widen judging by Monday's price performance. While beans were lower, December corn prices were 3.25 cents better at $3.305 per bushel. Corn's price has rallied nicely from a seven-month low last week at $3.1475. While the crop report is showing better field conditions than normal, only 31% of plants were reaping grain as of last week's report. That compares to a 54% average over the last five years and is creating this divergence between the bean and the kernel.

The soybeans might be suffering at the hands of more rain, but if the corn fields don't get their much-needed sunshine, theses two crops are set to continue heading in different directions for a little longer. 

The Supreme Council of the Secret Order of Jurojin