CBOT July wheat was down 24-1/4 cents at $6.38-1/2 a bushel.
Grains followed declines in crude oil and gold as the U.S. dollar rose sharply after the U.S. Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.
Commodity funds hold a net long position in CBOT corn, soybean and soyoil futures, leaving the markets prone to bouts of long liquidation.
“All these outside markets – the funds (are) just exiting. The charts, certainly in beans, meal and oil, look ugly,” said Dan Cekander, president of DC Analysis.
CBOT July soyoil fell by its expanded 5.5-cent daily limit to 56.57 cents per pound, nearly 9% on the day, as global vegetable oil markets retreated from multi-year highs.
Traders expect showers to bring relief to dry areas of the U.S. Corn Belt over the next two weeks, improving production prospects. Thursday’s weekly U.S. Drought Monitor, prepared by a consortium of climatologists, showed severe drought across 41% of Iowa, the top U.S. corn producer and the No. 2 soy grower.
“When the market seems rain in front of it, it extracts premium accordingly,” said Dan Basse, president of AgResource Co in Chicago.
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