U.S. Corn Futures Hit Limit on One-Day Decline on Japan

Chicago futures U.S. corn reached the limit in one-day decline in relation to the Japanese nuclear crisis led traders to reduce risk in a number of markets.
Corn futures for May and July delivery fell 30 cents in morning trading, the biggest daily drop allowed in Chicago Board of trade rules. The contracts have since recovered a bit, the May futures recently trading 28 cents, or 4.2%, lower at $ 6.38 bushel.
Wheat, soybean and hog futures fell under strong selling pressure, while cattle and rice futures hit the limits on the rate cut one day.
"Uncertainty about the global economy and the events in Japan are pushing to almost everything," said Kayla Hoffman, a grain trader in North Dakota.
The markets tumbled as the biggest concern for the infrastructure and economy of Japan after the earthquake and tsunami on Friday and a subsequent crisis in a nuclear plant. Concerns that Japan's demand for commodities will fall in the short term sent to buyers on the sidelines as investors pulled money out of risky assets for more liquid holdings as the U.S. dollar analysts said.
Japan is the largest customer for U.S. corn and exports of pork and a key consumer of soybeans, wheat and meat.
"Every time your main customer is the kind of problems we're seeing in Japan is finally going to affect the amount of business they do with you," said Tomm Pfitzenmaier, an analyst at Summit Commodity Exchange in Iowa
Corn futures have retreated 12% since reaching a maximum of 32 months on 4 March on concerns that global supplies fall short of continued strong demand. However, concerns have grown about a possible global economic slowdown, driven by high energy prices and turmoil in the Middle East and North Africa. Japanese disaster is further fueling concern among investors.
The settlement is positive for users of maize as livestock producers who are able to ensure grain at lower prices. End users are "just sit back and enjoy the correction," said Rich Feltes, research vice president at the brokerage firm RJ O'Brien.
However, grain users are still nervous about supplies, with corn will reach a minimum of 15 years at the end of the marketing of the crop on 31 August. Farmers are expected to significantly increase the area planted in the spring to replenish inventories, but yields fluctuate depending on weather conditions.
Wheat futures continued on Tuesday to withdraw from two and a half peak set last month. of soft red winter wheat for May delivery hit a minimum of three months, recent business activities by 46.25 centavos, or 6.4%, to $ 6.7450 a bushel on the CBOT.
Japan, a regular buyer of wheat, said it is conducting regular auctions of imported wheat, despite the earthquake and tsunami. However, traders are concerned that the government can reduce its purchases or unable to accept delivery of the grain due to damaged ports in the north.
Soybean futures approached at least three months, with the May contract is sinking 49.5 cents, or 3.7%, to $ 12,905 a bushel. Rice futures briefly fell the daily limit of 50 cents in one-day decline, as the sale of grain swallowed up the markets. Rice for May delivery was recently down 38 cents, or 2.8%, to $ 12,995 per quintal. Pork futures also continued to record declines, with the April contract down 0.9% to 85.20 cents a pound.
Cattle futures for delivery in April, June and August dropped to three cents per pound in morning trading, the biggest daily fall under the rules allowed Chicago Mercantile Exchange. The contracts have since recovered, with cattle for April delivery was recently down 2.5 cents, or 2.2%, to $ 1.14 a pound.
Export markets are considered by analysts and economists to be the key piece that has been performing U.S. markets beef multi-year highs, despite representing only 10% of total meat sales. Japan is the export market and third largest U.S. beef.

(Source: http://online.wsj.com/article/SB10001424052748704662604576202572783285238.html)