Posted by: usset001 | September 26, 2011

A serious retrenchment in corn and soybean prices

September has been a cruel month for grain prices. New crop soybean prices ended the month of August perched above $14.50 per bushel. Today the market for Nov’11 soybeans traded as low as $12.26, 16% lower than the late August close. The story is the same for corn. After topping out at $7.75 per bushel in late August, Dec’11 new crop corn traded as low as $6.45 today, also a 16% drop in prices.

While the retrenchment in grain prices is sharp, these markets are almost serene when compared to the action in silver. On Wednesday of last week, December silver (SIZ’11) closed at $40.5 per ounce. This morning the market traded as low as $26 per ounce. That’s a 35% decline in the value of silver in less than 3 trading days.

As incredible as that drop in price seems, this is the second severe drop in silver prices in the last 6 months. From Monday, May 2 to Friday, May 6, – 5 trading days – silver lost nearly 25% of its value.

We need to create a new adjective to describe the volatility shown in silver.

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