March 15 (Bloomberg) -- Wheat fell to a four-month low, and corn and soybeans tumbled on concern that the earthquake and nuclear crisis in Japan will reduce raw-material demand.
Equities in Japan had the biggest two-day drop since the 1987 crash as the risk of radiation leaks north of Tokyo escalated. U.S. Treasuries surged. Japan is the world’s leading buyer of corn, the third-largest importer of soybeans and the fifth-biggest purchaser of wheat.
“Increasing levels of radiation have people dumping positions in stocks and commodities and piling assets into cash,” said Alan Brugler, the president of Brugler Marketing & Management LLC in Omaha, Nebraska. “There’s increased risk aversion until the situation stabilizes in Japan.”
Wheat futures for May delivery dropped 50.5 cents, or 7 percent, to $6.7025 a bushel at 10:18 a.m. on the Chicago Board of Trade. Earlier, the price touched $6.6875, the lowest for a most-active contract since Nov. 17.
Corn futures for May delivery fell by the CBOT limit of 30 cents, or 4.5 percent, to $6.36 a bushel, the lowest since Jan. 20.
Soybean futures for May delivery slid 59.25 cents, or 4.4 percent, to $12.8075 a bushel. Earlier, the price touched $12.76, the lowest since Dec. 13.
Shipments into Kashima and other ports on Japan’s east coast were stopped because of power outages after the 9.0- magnitude earthquake and tsunami, Zen-Noh, Japan’s largest corn buyer, said yesterday. Japan said today it plans to buy 32,381 metric tons of wheat in a tender on March 17, 76 percent less than it purchased last week.
Screen Imports
Asian countries moved to screen food imports from Japan following explosions at the Fukushima nuclear plant that raised radiation levels at the complex to harmful levels.
South Korea, Indonesia, Thailand, Malaysia, Singapore and the Philippines took steps to check fruit, vegetables, meat and seafood from Japan for nuclear material.
“It’s a fear-driven trade” focused on Japan, said Frank Cholly Sr., a senior strategist at Lind-Waldock, a broker in Chicago. “Demand is going to slow down, because even though they need to eat, they have more urgent things. They’ve got to stop the radiation leak, and they’ve got to find any survivors.”
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government figures show. Wheat is the fourth-largest, behind hay, at $13 billion.
--With assistance from Daniel Ten Kate in Bangkok, Luzi Ann Javier in Singapore and Tony C. Dreibus in London. Editors: Patrick McKiernan, Steve Stroth
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