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Farm markets fall hard

Updated: 11/21/2011 @ 2:21pm

DES MOINES, Iowa (Agriculture.com)--The sinking stock market pulled every other market lower, including the corn, soybean and wheat markets Monday.

The Dec. corn futures settled 12 1/2 cents lower at $5.97 3/4. The Jan. soybean contract closed 20 1/4 cents lower at $11.48. The Dec. wheat futures ended 6 3/4 cents lower at $5.91 1/2. The Jan. soymeal futures settled $9.00 per short ton lower at $291.30. The Dec. soyoil futures closed $0.99 lower at $49.89. 

In the outside markets, the NYMEX crude oil is $0.74 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 270 points.

Jack Scoville, PRICE Futures Group vice president, says it's simply a bad day for commodities.

"This move lower for me is almost completely due to the EU situation and the collapse of the debt talks here in Washington. There is little in the world of grains to suggest this kind of a move lower.  Volumes still on the light side due to MF and the holidays. This is usually an up week, but the outside markets are saying no to that idea right now.  All in all a bad day, spec selling primary I think, and some funds probably trying to cover some calls in other places by selling grains," he says.

One CME Group independent trader, requesting anonymity, says grains are not only regarded as commodities but as asset classes. Therefore, a day like today, where the outside markets are tanking, can mean trouble for grains.

"The European debt crisis is certainly overshadowing the market with a "risk off" mentality prevailing…i.e. funds raise cash across all asset classes. Fear of recession also translates into less demand for commodities (less meat consumption means less feed, less travel means less gas means less ethanol etc, the trader says."

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