Grain futures dropped sharply today in Chicago, as traders were spooked by Chinese premier Wen Jiabao's announcement that the world's largest country would take unspecified measures to combat speculation in commodities and inflation.
Soybean futures, corn futures and wheat futures took a hit after the premier said that the cabinet is in the process of drafting measures, which some speculate could include price limits and stiff penalties for speculation.
"Fears of China cracking down on inflation, without giving any specifics, will keep pressure on the markets," Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, told Bloomberg News. "People are getting to the point in the year where they may be willing to liquidate commodity long positions and wait and see what happens in China."
On the Comex, December corn futures slid 8 cents to 526 cents per bushel, while soybean futures for January 2011 delivery lost 52.5 cents to trade at $12.165 per bushel. December wheat futures slid 40 and 1/8 cents to 629 cents per bushel.
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