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316481

Will corn, soybeans make lows in August, analyst asks

Watch for key anniversary of low price weeks, analyst says.

Last year at this time grain prices were grinding lower. The news was negative. The corn and soybean crops looked great and the grain trade was bearish.

At that time, funds were holding huge short positions.  Every year is different. Prices are a lot higher this year than last year. 

However, I have learned to look at key anniversary weeks and mark them on my long-term charts. 

First, note that in 2020 the low weekly close came the first Friday in August at $3.07. The following week corn put in a double bottom at $3.07 and then closed 16¢ higher on the week ending August 14, 2020.

For soybeans, the market made a new low the second week of August by 1¢ and then closed 33¢ higher the week ending August 14, 2020. 

From that low the second week of August prices put in a huge rally into the second quarter of 2021. 

Last year, two very positive fundamental developments came in that created the weekly price reversals. First, the derecho that hit in Iowa and the weather turned hot and dry. Also, China went on an aggressive buying spree. 

I do not see that happening again. However, I always watch the anniversary of lows and over the next two weeks, including this week, we are in the ideal time frame for the 15–18-week cycle low. 

What can signal the low? First, watch to see if prices can hold the late July lows in early August. Second, watch for a Friday to Friday higher close.

I am not sure what will happen this year, but I know what to watch for. 

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