Soybean futures faced sharp selling on concerns China will work to curb inflation. Soybeans closed around 66 cents lower in 2010-crop contracts, with far-deferred months 50-plus cents lower. Speculation China is gearing up to impose price controls and raise interest rates to slow their economy and curb inflation triggered widespread selling in the commodity world.

Corn futures closed mostly 26 to 29 cents lower, although the July contract finished limit down (30 cents). Concerns over Chinese demand for commodities after comments by Chinese officials saying the country will fight price inflation via price controls and higher interest rates weighed heavily on the commodity sector today.

Wheat futures faced sharp selling, closing just off session lows to finish 40-plus cents lower at all three exchanges. Widespread selling in the commodity markets today was triggered by
reports China may use price controls and higher interest rates to curb inflation.

The December through July cotton contracts ended down today’s 500 point trading limit. As a result, the daily trading limit is expanded to 600 points for Wednesday. The October and December 2011 contracts finished sharply lower, but not limit down. Cotton futures got caught up in a major commodity selloff today.

Lean hog futures posted sharp losses, but worked well off session lows into the close. Lean hog futures were pressured by a broad-based selloff in the commodity sector today amid concerns China is going to raise interest rates and use price controls to limit inflation. Fundamental pressure came from an unexpected dip in cash hog bids.

Cattle futures saw spillover from widespread selling in the commodity sector, although pressure in the feeder cattle pit was limited by weakness in the grain markets. Live cattle closed 50 cents to $1.17 1/2 cents lower, which was well off session lows in most contracts. December live cattle futures closed nearer the session low, but didn’t do any technical chart damage.

Bron: CME