SINGAPORE: US wheat futures slid to a one-month low on Monday, falling for a fifth straight session amid broad weakness in global markets triggered by concerns over Europe's ability to tackle its worsening sovereign debt crisis.
Soybeans rose for a second straight session ahead of a US government report that is likely to forecast tightening global stocks after harsh August weather.
Asian stocks fell and the euro sank to a six-month low against the dollar after the resignation of a top German European Central Bank board member cast further doubt on the prospects for resolution of Europe's worsening sovereign debt crisis.
Oil and copper prices slipped and the dollar gained broadly as worries about the euro zone's woes combined with fears about flagging world growth to ensure no let-up in the gloom that has pervaded markets for much of the past six weeks.
Still, corn and soybean futures have been largely insulated from the economic crisis as hot weather in the United States, the world's top exporter of grains and oilseeds, is expected to further tighten world supplies.
"A strong report may see prices rebound, particularly given that drought conditions continue across the US Great Plains, negatively impacting hard red winter wheat planting," Commonwealth Bank of Australia strategist Luke Mathews said in a report.
"But the European financial crisis will provide a stiff headwind to prices."
Chicago Board of Trade benchmark December wheat fell half a cent to $7.29-1/4 a bushel by 0256 GMT, the lowest since August 11.
December corn lost 1 cent to $7.35-1/2 a bushel, while November soy rose 4 cents, or 0.3 percent, to $14.30-3/4 a bushel.
The hottest summer in more e than half a century is shrinking the US corn crop, which will cut the nation's corn stocks to their smallest in 15 years next summer and raise already high global food prices.
A group of 28 analysts and crop forecasters polled by Reuters ahead of the report estimated, on average, this year's corn crop at 12.519 billion bushels, down 3 percent from the USDA's outlook in August.
The average US 2011 soybean production estimate was 3.032 billion bushels, down 0.8 percent from USDA's August figure of 3.056 billion. It would be the smallest US soybean crop in three years.
Some analysts think the size of the crops will be further downgraded in future USDA reports, due to the combination of heat stress during pollination and the decimation of corn area by record flooding in the western Midwest.
There was additional support for the soybean market on Monday with a forecast of some frost in the northern parts of the US Midwest crop belt this week, although it was expected to cause a severe damage to the crop.
"The potential for frost and light freeze conditions over northern areas of the Midwest later this week could cause minor damage to any immature corn and soybeans," said Mike Palmerino, an agricultural meteorologist with Telvent DTN.
"However, due to the warm weather this summer, crop development is not as far behind as expected due to late plantings this spring."
The dollar index , which measures the strength of the greenback against a basket of currencies, rose 0.4 percent, the highest since February 23.
Copyright Reuters, 2011
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