Wheat, corn, soybeans fall as global markets slump

HAMBURG, Aug 5 (Reuters): Chicago wheat, corn and soybeans fell on Monday, weakened by a sudden slump in global financial markets.

Grain and oilseeds dropped despite dollar weakness which would be positive for US export sales. Positive US crop prospects also added to the weakness.

Chicago Board of Trade most-active wheat fell 2.4 per cent to $5.25-3/4 a bushel at 1123 GMT.

Corn fell 1.2 per cent, dropping below the $4.00 level to $3.98-1/4 a bushel. Soybeans fell 0.5 per cent to $10.21-1/4 a bushel.

Global stock markets tumbled on Monday as fears of a US recession sent investors fleeing from risk, while wagering that rate cuts would be needed to rescue growth, with the dollar falling against major currencies.

"The big sell-off in world equity and other financial markets today has also pushed down wheat, corn and soybeans as a risk-off atmosphere prevails," said Matt Ammermann, StoneX commodity risk manager. "This is overriding the impact of the weaker dollar which would usually be supportive for US grains and soybeans."

"The market has flipped to assessing the risk of a US recession with the risk financial investors could move into fresh short positions."

US weather was forecast to be largely dry this week, positive for the final stages of the US winter wheat harvest.

The US Department of Agriculture (USDA) is due to report on US crop progress and conditions later on Monday.

"US weather is looking non-threatening to crops this week which is also a weakening factor," Ammermann said. "There are increasing expectations that the USDA crop conditions report will show a positive picture of US corn and soybeans."

The EU wheat harvest, hindered by summer rain, was showing progress.

French farmers harvested 67 per cent of this year's soft wheat crop by July 29, advancing from 41 per cent a week earlier, though behind usual progress after rain disrupted work.