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With the U.S. providing much of the corn and soybeans for the world, the drought in America's Midwest has driven up the ETFs for corn ( CORN , quote ) and soybeans ( SOYB , quote ). Needless to say, speculators have jumped on board, sending soybean and corn prices even higher.

In addition to food, corn is also used for fuel and alcohol products.

Also folded into the mix was the anticipation that the U.S. would initiate more economic stimulus measures in the form of a new round of quantitative easing (QE3).  QE2 lowered the value of the U.S. dollar, sending prices soaring for commodities such as grains, oil, silver and gold as traders piled into hard assets. Corn prices and soybean prices both surged as a result. Central banker actions resulted in a bearish market for many fiat currencies.

In recent trading, however, the prices for the exchange traded fund for CORN and SOYB have started to diverge. CORN and SOYB had both risen steadily since June.  As the chart below shows, this also happened in the March to June quarter.

This could tell us that speculators are starting to sell and book profits. There have been many pullbacks along the way of SOYB and CORN prices soaring to new records. The price increases for each has far exceeded the shortfall in the harvest, creating a fundamental imbalance that market forces will eventually close.

Federal Reserve Chairman Ben Bernanke's speech on Friday disappointed many who were expecting the announcement of a third round of quantitative easing (QE3).  Instead Bernanke described what one analyst termed a program of "QE forever." That is hardly the gift traders were hoping would drive up commodity prices, as happened during QE2. It is much more likely that SOYB will follow CORN down, as it has been corn prices that havfe driven up those for other grains.

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