Chicago grains tumble on concerns of economic slowdown

Chicago grains tumbled on Monday, as investors worried that the surging oil prices would affect economic recovery and thus, dampen global grain demands.


The most active corn contract for May delivery closed at 7.1075 U.S. dollars per bushel, down 10.5 U.S. cents, or 1.5 percent. May wheat shed 31.5 cent, or 3.8 percent, to 8.0075 dollars per bushel. May soybean lost 19 cents, or 1.3 percent, to 13.95 dollars per bushel.


Market analysts said that investors feared that continued hikes in energy price could eventually slow down the world economy, and thus, increase selling in agricultural markets.


Analysts added that fund traders were major sellers who are exiting agriculture markets and shifting their money toward energy and metal markets.


Crude oil Monday rose to a 29-month high of 105.44 dollars in New York on concern that turmoil will spread to more Middle East producers.


The wheat market suffered the sharpest drop in the day, as a negative tone for the economy, less concerns with the China wheat crop and an improved weather outlook for the U.S. crop helped to drive the market lower.


Traders noted that talks of increased chances of rain for the central plains of U.S. this week and some chances of a little rain in the western plains helped to pressure the market in early session, and weakness across other agricultural markets further weigh on the market amid heavy selling.


Meanwhile, the soybeans market was pressured by better-than- expected rain coverage in Argentina, a record harvest in Brazil as well as the news that that the Argentina port strike has ended.
(Source:http://news.xinhuanet.com)