Don’t let that frighten you. And don’t jump off a cliff. I throw that number out there more for conversation purposes than an outright prediction. On the other hand, if history repeats itself, that is likely the downside target for soybeans. This is a potentially very bearish situation soybean producers could be facing in the next several months.

The chart above displays a very interesting potential scenario. After peaking in May 1997 at $9.03, the market declined to $4.02 by July 1999, a 55% drop in prices. In April 2004 the market peaked at $10.64 and dropped to $4.99 – a decline of 53%.

July 2008 witnessed a top price of $16.60 followed by a drop into December 2008 at $7.77, a 54% decline.

It is frightening that the percent declines have been almost identical in the past three bear markets. If this particular market declines 54% from the August peak at $17.78, the downside target becomes $8.18.