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Farm markets close 'limit down'

Updated: 02/22/2011 @ 2:06pm

CHICAGO, Illinois (Agriculture.com)--The CME Group markets close at daily limit lows Tuesday.

The March corn futures settled 'limit down' 30 cents at $6.79 3/4. The March soybean contract closed 'limit down' 70 cents at $12.98.  The March wheat futures closed 'limit down' 60 cents at $7.62 3/4. The March soymeal futures closed $16.40 per short ton lower at $345.60. The March soyoil futures ended $2.50 lower at $53.99.

In the outside markets, the NYMEX crude oil is $7.89 per barrel higher, the dollar is slightly higher, and the Dow Jones Industrials are down 170 points.

Tim Hannagan, PFGBest.com senior grain analyst, says the markets traded like two hats tossed into the ring. "The first hat took prices sharply higher in overnight trade with crude oil up over 8 dollars on Middle East strife, pulling corn-based ethanol and bio-fuels from soyoil along."

The second hat brought on selling and sharply lower overnight and day session prices, as China failed to pass a bill to lift soybean and soyoil tariffs that would make it easier to import the grain, he says. "China has slowed bean purchases recently as South American beans are hitting the market now."

Jack Scoville, PRICE Futures Group vice-president, says it's been a wild day.  "We were higher overnight with the Crude Oil, but it seems like late in the overnight session that attitudes changed and reduction of risk positions became more important, and down we went."

There has been some follow-through selling coming from specs and funds, he says. "Except for Libya, there is not a lot of bearish news out there, and most analysts seem to think fundamentals remain bullish. However, South America is on-line now with lots of soybeans for the world and there is a lot of concern about what USDA might say with the Outlook Conference, later this week."

Scovile adds, "Overall, lots of spec liquidation it seems with almost no one brave enough to buy into it for now."

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