The shortage in soybeans this year could be even worse than the dwindling corn crop, according to Jim Bower, president of commodities brokerage firm Bower Trading, as the dry, hot weather does not look to be letting up and soybeans are moving into the key development stage.

Barclays and Goldman Sachs increased their price forecast for grain futures, citing supply concerns for corn because of the drought and a dismal forecast from the U.S. Department of Agriculture.

Corn is continuing its rally, and Bower told CNBC he believes soybeans could follow suit.

The latest USDA crop report showed that 40 percent of the soybean crop is in good to excellent condition, down from 45 percent in the previous week. At the end of June, the percentage was 53 percent.

In addition, the report estimated that the 2012 soybean production will be 3.05 billion bushels, down from the previous estimate of 3.205 billion bushels.

“When you look at the USDA forecast and the weather forecast … I think some attention, from an analytical standpoint and a trader standpoint, really needs to follow this soybean market because we’re down to about a 4.2 percent stocks-to-use ratio in soybeans right now,” Bower said. “And that’s without any further weather problems in the Midwest.”

The damage to corn is irreversible, but the key period for soybeans is the next several weeks.

“The critical time for soybeans is the last two weeks of July and first three weeks of August,” Bower said. “If soybeans face the same parched weather conditions as corn, the price of soybeans will go wild.”

While corn production will likely be furthest from the trend since 1988, when there was a national drought, soybeans could have tighter supply-demand issues than corn if the weather doesn’t improve, he noted.

“I can’t tell you what the weather is going to be the last two weeks of July and the first three weeks of August, but I can tell you that if this weather stays inflammatory, and we keep dropping this yield down on soybeans, we could be faced with a protein shortage worldwide in the months to come,” he said.

Bower noted that for this type of market structure, weather is the key price determinant.

“You don’t really want to look too close at the price,” he told CNBC. “You step back on a daily basis and if the crop is getting bigger, sell. If it’s the same, sit. If it’s getting smaller, keep buying.”

Bower cannot predict where the price of soybeans would go if the conditions that hit corn already affect soybeans in the same manner.

“We’d have to go to demand destruction and it will get very, very wild,” he said.