Soy, wheat plunge on Japan crisis; corn locks limit down

CHICAGO: US grain futures fell sharply on Tuesday amid panic selling linked to Japan's nuclear crisis, with wheat and soybeans both hitting their lowest levels in more than three months and corn falling the maximum daily trading limit.

"This is strictly panic selling because of Japan. We'll have to watch the Dow, gold and crude to see if they recover. I think those markets have to recover before grains recover," said Joe Bedore, CBOT floor spokesman for trade house Intl/FC Stone.

Crude oil was trading well below $100 a barrel, and the Dow Jones industrial average fell more than 200 points.

Fears of a potential radiation disaster in Japan grew after an earthquake-crippled nuclear power plant exploded and sent low levels of radiation floating toward Tokyo.

Corn futures at the Chicago Board of Trade were down their maximum daily trading limit of 30 cents at $6.36 per bushel at 10:20 a.m. CDT (1520 GMT).

Wheat fell as much as 52-1/4 cents to $6.68-1/2, the lowest level since Dec. 1. Soybeans dropped as much as 64 cents to $12.76, the lowest price since mid-December. The downside limit for wheat is 60 cents a bushel and 70 cents for soybeans.

Corn, wheat and soybeans all posted their biggest percentage declines in three weeks.

"Traders are moving to the sidelines until the situation in Japan stabilizes," said Dan Cekander, a grains analyst at Newedge USA. However, "there has been a tremendous change in (grain) ownership from long funds to consumers," he added.

"It's external macro and geopolitical factors that are driving grains markets. There has been nothing fundamental in grains that could have driven prices down -- it's just more risk off," said Victor Thianpiriya, an agricultural commodity analyst at ANZ in Melbourne, Australia.

"Generally, the market will remain volatile given the situation in the Middle East and North Africa as well as Japan. But there is potential to see buying on the dips, especially in corn and soy, where the balance looks like it will be tight at the end of the season."

Japan is the world's biggest importer of corn and third-largest of soybeans, the main ingredients in animal feed.

The world's No. 3 economy also is the fourth-biggest wheat importer and plans to buy 4.96 million tonnes of milling wheat in the year to March 31.