Chicago Meltdown

11/03/11 -- The market had already been in turmoil all week, watching the events unfold in the Middle East and North Africa. Throw a massive earthquake and a tsunami into the mix and traders just want to get out. The thing is nobody knows right now what the state of play is going to be on Monday morning, and that is making speculators "revisit" their enthusiasm for being long grains.

We'd already been down all week on long liquidation and concerns that rising oil prices would damage global economic growth. Now we have the cost of Friday's devastation to the world's third largest economy, and the possible implications of at least one of Japan's ageing nuclear reactors going into meltdown over the weekend.

Soybeans: Mar 11 soybeans closed at USD13.26 1/2, down 22 1/4 cents; Mar 11 soybean meal ended at USD346.10, down USD3.00; Mar 11 soybean oil closed at 55.49, down 99 points. Mar beans were down 81 1/4c on the week, with Mar meal falling USD17.70 and Mar oil down 347 points. "Very heavy rain in Mato Grosso - Brazil’s largest soybean state producing nearly 30% of the national crop - boosted pod filling last month. Parana - Brazil's second largest soybean state - is also expecting a bumper crop," say Martell Crop Projections.

Corn: Mar 11 corn closed at USD6.59 1/4, down 17 cents; Dec 11 corn closed at USD5.77 3/4, down 9 1/2 cents. Corn was limit down at one point on the news from Japan - the fifth largest corn consumer in the world and America's top buyer of the grain. On the week as a whole Mar corn was down 62c. A warmer and drier forecast for much of the Midwest next week is welcomed, and although that warmer pattern continues into the following week more unneeded rainfall may come with that, say Martell Crop Projections.

Wheat: Mar 11 CBOT wheat closed at USD6.95, down 19 cents; Mar 11 KCBT wheat closed at USD8.20 1/2, down 18 1/2 cents; Mar 11 MGEX wheat closed at USD8.53 1/4, down 23 cents. Mar CBOT wheat finished last week above USD8/bushel and now closed it under USD7/bushel for a 105 1/2 cent loss on the week. Japan is a regular US wheat consumer, routinely tendering for 100-150 TMT most weeks. It seems like they maybe have an enforced absence from the market for a while.