Did Japanese “demand destruction” cause corn and beans to drop last week? Or was it something else?

Market Pulse: Mar. 21, 2011

Last Monday, May corn opened at 665½ and closed the week at 683½. The low for the week was hit on Wednesday at 608 and the high was hit on Friday at 691½. As for May soybeans, they opened the week at 1336 and closed the week at 1362½. The low for the week was on Tuesday (limit down) at 1270 and the high came in on Friday at 1385¾. On Tuesday, the business media first mentioned the term “demand destruction,” a result of the Japanese earthquake. While I agree with the idea that there may be a slow-down regarding Japanese demand, I do not feel the word “destruction” was a good choice. I guess if the media used the term “slow-down” it would not have been as effective to instill fear as the word destruction. You can see from the above price action that true fundamentals were ignored for a couple of days. Actually, the drop in prices helped some big players liquidate.

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