Corn plunges, oil soars in jittery markets

Concerns about unrest in the Middle East caused what a trader called "massive risk aversion" in commodities Tuesday.
Corn fell its limit of 30 cents per bushel to $6.80 for the March contract, and soybeans dropped 70 cents per bushel to $12.98 for March.
The plunge in corn was an oddity because crude oil rose by $5.71 per barrel on the New York Mercantile Exchange to $95.42. Brent crude on the London Intercontinental Exchange reached as high as $108.20.

In recent years, rising oil prices have tended to push up the price of corn, but on Tuesday investor fears overcame normal market patterns.
"There is massive risk aversion on the market today," said trader Don Roose of US Commodities in West Des Moines. "People are starting to worry about the safety of shipping, and that hits at exports."
The doubling of the price of corn from $3.50 per bushel last June has been fueled in part by a rise in exports, as well as tight domestic and worldwide supplies.

"Grain fundamentals remain strong, but fear trumps fundamentals every time, especially when investors have large profits at risk," analyst Arlan Suderman of Farm Futures Magazine said.
Suderman suggested that the bear market may be short-lived.
"A look back at the global recession of 2008-09 finds that worldwide demand for corn and wheat combined, as well as for soybeans, continued to trend higher through the period. There's no reason at this point to think that it will do anything different this time as well," he said.

Livestock markets were hit as well on Tuesday. Live cattle dropped 95 cents per hundredweight to $110.10, and feeder cattle were down 87 cents to $129.20. Both have traded at all-time highs in recent weeks.
Hogs were unchanged at $92.27 per hundredweight.

(Source: http://www.desmoinesregister.com/article/20110223/BUSINESS01/102230354/1001/)