The grain complex started the month of September on a positive, trading at some of the highest price levels seen in a couple years. Corn futures were trading at an all time contract high along with a 3 year high, Soybean futures were finally able to break higher from their eight month price range between 14.00 - 13.00 per bushel allowing Soybean to trade at a contract highs last seen in June 2008, and Wheat futures were trading in the 8.00 per bushel range.

With the grain complex up for the year and strong macro trends higher, bulls were poised to continue the rally. The first two weeks of trading were light due to the shortened trading week in observation of Labor Day. With prices at all time highs, a minor reaction was due before prices could continue their rally, but that was not the case this time around. When the grain complex started to trade at mid August price levels, buyers started to re-evaluate their long term view on the grain complex as many other commodity markets were experiencing a market correction.

Major Index futures, precious metals, and energies were trading down for the year while grains continued to hold gains. Grain prices started to breach major technical support levels and the selling pressure amplified when there were not enough buyers to move the market higher. Corn futures started to trade below their major price support 7.00 per bushel and August monthly lows mid month. Once prices were able to settle below the major support, sellers stepped in causing traders with long positions running for cover. With the month and third quarter coming to an end, the selling continued to magnify causing Corn to hit their new price limit of 40 cents, and settle limit offer on the last trading day of the month. Corn futures lost all their gains for the summer and settled the month down at 5.9275 per bushel, the lowest close since the first week of July.

Soybean futures experienced selling pressure early in the month when they started to trade below their major price level of 14.00 per bushel. With Soybean prices continuously settling below 14.00, buyers lost faith in higher prices and started to unload their long positions. Prices continued to decline every day in the Soybean pits and the selling pressure increased when they traded below their major price support of 13.00 per bushel and below August monthly lows. Volume picked up with over 100,000 contracts trading on a daily basis, as prices continued to fall. Coming into the end of the month, Soybean traders pushed prices below 12.00 per bushel to settle the month down at 11.79 per bushel. Soybeans lost $2.90 per bushel in a single month. The massive selloff put prices at the lowest levels for the year and near December 2010 levels.

Wheat futures were no different from the rest of their neighboring grains. Wheat prices were lower than Corn and Soybeans for the year, but well off their 2010 levels when September started. There was a lot of spreading activity between Corn and Wheat throughout the month. From the start of the month Corn was over Wheat, but towards the end of the month, Corn was trading under Wheat on the spreads. Historically, Wheat prices stayed higher then Corn, but due to the global demand, Corn prices picked up for the past couple months trading at a premium to Wheat. As the month came to an end, historical data helped push Corn prices down and lift Wheat prices up on spreads with Wheat on a premium to Corn now. During the second half of the month, Wheat prices broke below 7.00 per bushel and their August monthly lows. This triggered sell stops and encouraged sellers to step it up. Wheat prices continued to sell off into the end of the month causing prices to trade down for the year and back to levels last seen in June 2010.

Soybeans and Wheat futures are trading down for the year, while Corn is positive. Can Corn hold their gains into the end of the year or will the commodity correction drive prices down?

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