SINGAPORE -- Commodities tumbled across the board on Tuesday, caught up in a panic that swept financial markets on fears a recession in the United States would hit global demand.

But analysts expect China's seemingly insatiable appetite would prevent sharp falls in industrial commodities, while agricultural products would be supported by strong demand from the biofuel and food sectors.

Crude oil fell to a six-week low and hovered close to $88 a barrel, gold dropped to a two-week low, metal futures in China plunged by their daily limits and soybeans on the Chicago Board of Trade tumbled as much as 4.0 percent.

"This is a meltdown. The weakness is spreading, and there is nowhere to hide outside government bonds, and of course cash," MF Global analyst Edward Meir said.

The failure of a $150-billion stimulus plan by President George W. Bush to lift financial markets and doubts expressed by financial institutions on growth has sent a clear signal to the commodities market that demand will be hit.

As investors fled to safe-haven government bonds, share markets from Tokyo and Hong Kong to Seoul and Sydney slumped around 5.0 percent. Taking a cue from sliding equity markets, the US dollar fell to a 2-1/2-year low against the yen.

"The feeling now is the economic fall-out from the sub-prime issue in the United States might spread out to Japan, Europe," said Tobin Gorey, commodities strategist at Australia's Commonwealth Bank.

US crude, which has fallen about 12 percent from a record high of $100.09 on Jan. 3, was trading at $88.22 a barrel by 0450 GMT. London's Brent crude was at $87.06 a barrel.

The fall in oil prices will make it increasingly less likely that OPEC would bow to US pressure to raise production when it meets in just over one week's time to discuss policy.

Shanghai copper and zinc futures fell by their 4.0 percent daily limits. The April copper contract, the most active on the Shanghai Futures Exchange, dropped 2,450 yuan from Monday's settlement to 58,560 yuan ($8,088) a ton.

Copper for delivery in three months on the London Metal Exchange was down $45 at $6,825 a ton at 0450 GMT, having lost nearly 4.0 percent in the previous session.

But demand from China remains strong, with its refined copper imports up 16.5 percent on the year to 111,685 tons in December and 1.49 million tons in 2007, up 80.6 percent, customs data on Tuesday showed.

"The Chinese trade data is one of the few bright spots in the metals market. But it isn't going to affect the immediate bearish market sentiment," Meir added.

GOLD AND GRAINS

Gold fell but traders expect the market to eventually draw safe-haven demand on overall financial market uncertainty.

"When heavy sell-offs in global stocks are happening, it's tough to buy gold," said Hiroyuki Kikukawa, an analyst at IDO Securities in Tokyo.

Spot gold was at $856.25/857.25 an ounce by 0450 GMT, down from $864.30/865.00 in late European trade on Monday.

Malaysian palm oil futures, which surged to a record high of 3,420 ringgit last week, fell 4.7 percent. The benchmark April contract on the Bursa Malaysia Derivatives Exchange fell as much as 153 ringgit to 3,090 ringgit ($939.2) a ton.

March soybeans were down 46-¾ cents to $12.17-¼ a bushel. March corn tumbled 20 cents to $4.78-¼ a bushel and wheat fell 28 cents to $9.34-1/2.

Agricultural commodities are still hovering close to record highs hit in recent weeks.

"The demand for farm commodities will be strong. The entire biofuels complex and other things will help the market," said Simon Games-Thomas, head of agricultural commodities at UBS AG.

Tokyo rubber futures tumbled by their daily limit to their lowest in six weeks. The benchmark rubber contract on the Tokyo Commodity Exchange for June fell eight yen, or 2.8 percent, to 277.3 yen a kg. Editing by Michael Urquhart

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