U.S. markets were closed on Monday 2/21/11 in observation of Presidents Day. While our exchanges were closed, there was a lot going on overseas in Libya and Japan. Geopolitical crises erupted in Libya and Japan's economic outlook was downgraded by Moody's to negative from neutral. These events caused massive volatility in the CME Group Globex markets which opened Monday 6pm ET.

Oil futures rallied higher during the overnight market above $100 a barrel. Grains also picked up unwanted volatility with Corn futures spiking to 7.4425. Soybeans and Wheat were not greatly affected as Corn has a stronger tie to Oil prices. When the markets opened on Tuesday morning, the bulls ran for cover as sellers were pushing the grain complex lower every chance they got. All three grains (Corn, Soybeans, and Wheat) settled at their limit down price by the closing bell.

Since the market settled at their daily imposed limit offer price, the CME Group expands their limit for the next trading session. The selloff in grains was magnified due to the uncertainty of the global economy. Once grain traders realized that the geopolitical issues overseas has no immediate effect on the price of a bushel of Corn, buyers stepped back into the pits and bought Corn, Soybeans, and Wheat into Friday.

During the last trading day of the shortened week, Corn and Soybeans hit their daily imposed limit bid price backed by support from the U.S. Department of Agriculture confirmation that demand for Corn and Soybeans remain robust. Those two grains were able to settle at prices pre Libya crises. Corn once again was able to settle the week at their highest levels since July 2008.

To learn more from Pratik and the guys at The Futures Room, visit their site at TheFuturesRoom.com