Farm markets 'tank'

--Corn closed at 2 month lows

--Soybeans closed at 3 1/2 month lows

--Wheat hit 7 1/2 month lows

--Soyoil hit 'limit' down

CHICAGO, Illinois (Agriculture.com)--Panic-selling created a free-fall in CME Group grain markets Tuesday, traders and analysts say.

The May corn futures closed limit down (30 cents) at $6.36. The July corn futures contract settled 'limit' down at $6.42 1/2. The May soybean contract closed 'limit' down (70 cents) at $12.70.  The May wheat futures closed 53 cents lower at $6.67 3/4. The May soymeal futures settled $14.70 lower per short ton at $340.80. The May soyoil futures closed down its daily $2.50 limit at $52.88.

In the outside markets, the NYMEX crude oil is $2.68 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 206 points.

The Japan nuclear crisis is causing traders to overdo a move lower, short-term, one CME Group floor trader says. "Funds are exiting, extracting money from these grain and soy markets. Keep in mind, the lower we go, the bigger the March 31 Planting Intentions Report becomes."

Jack Scoville, PRICE Futures Group vice-president reminds traders to keep in mind the fundamentals have not changed, during this Japan crisis. "Overall, there is just a lot of fear out there. I think the lower we go the better chance end users have to get some cheaper pricing done."

Regarding the March 31 Planting Intentions Report gaining momentum on this pullback, Scoville remains neutral. "Most planting ideas should be in by now as seed, etc. needs to be ordered. So, my thoughts are the 'buy side' is getting a gift. We will see if the buyers agree with me soon."

Joe Bedore, FC Stone's CME Group floor manager agrees that panic-selling engulfed the grain and soybean markets Tuesday.

"People want to get out of the market, period, regardless of price. I don't think anybody expected this harsh of a pullback. I think Japan's crisis started this fall, but the 'technicals' finished it," Bedore says. By exiting the market, traders are saying they don't want to deal with anymore margin calls and wanted to save some profits. So, you're seeing dumping of long positions."
Traders see two ways this free-fall will stop. One, if Japan gets complete control of their nuclear plants, the markets could calm, analysts say. "Or, number two, we're going to get to some technical numbers, somewhere down the line, and someone will step in and start buying corn and soybeans," Bedore says. "Whether that buyer is China or whomever. But, we do need to hit those technical levels which are not that far away; 25 cents for corn and 70 cents or so for soybeans. Realistically, that is only one trade session away."
For funds, the only way you reverse their minds on bailing out of this market is a friendly acreage number on March 31, many traders say. "The funds don't have to come back into this market. They can just sit there, they don't need it. So, to reverse the whole trend of the market, you're going to need a friendly acreage number," Bedore says.

(Source: http://www.agriculture.com/markets/analysis/corn/cn-straddles-limit-down_9-ar15359)