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Markets

Corn, wheat follow broad commodities weakness led by crude

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Wheat futures fell about 2 percent, retreating after Monday's short-covering rally, and soybeans were also lower.

As of 12:52 p.m. CST (1852 GMT), Chicago Board of Trade December corn was down 4-1/4 cents at $3.67 a bushel after dipping to $3.65-1/2, the contract's lowest since Nov. 2.

CBOT December wheat was down 12 cents at $5.07-3/4 a bushel and January soybeans were down 5 cents at $8.78-1/4 a bushel.

Corn took a cue from US crude oil, which hit an 11-month low on worries about weakening global demand, oversupply and sell-offs across other asset classes, including equities.

Corn sometimes tracks oil due to its role as the primary US feedstock for ethanol fuel.

"The 11-month low in crude is starting to weigh on everything," said Jeff French, analyst with Top Third Ag Marketing in Chicago.

The 19-market Thomson Reuters/CoreCommodity Index was down 1.6 percent, hitting its lowest since December.

Soybean futures declined but found underlying support after the US Department of Agriculture (USDA) confirmed private sales of 276,732 tonnes of US soybeans to unknown destinations.

Also, President Donald Trump's top economic adviser said that the United States welcomed the resumption of talks with China, the world's top soy buyer, on trade.

CBOT soft red winter wheat fell more than 2 percent, retreating a day after the December contract reached a three-week high on fund short-covering and optimism about improving export demand for US supplies.

"The feeling is (that) as we go deeper into the end of November and early December, we are going to see Russians pull back from their selling," said Don Roose, president of Iowa-based US Commodities.

However, Roose added, "When we rally, we become uncompetitive ... so we pull back."

Traders were monitoring a cold spell in the US Midwest and Plains that has stalled planting of the last of the winter wheat crop.

Ahead of the USDA's weekly crop progress report due later on Tuesday, analysts surveyed by Reuters on average expected the government to report the US winter wheat crop as 90 percent planted, up from 84 percent a week ago.

"I think there is real debate on how many acres (were) planted, and also the wheat crop conditions," Roose said.

The USDA will release its first official estimate of US winter wheat seedings in January.

Copyright Reuters, 2018