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Grains - Wheat, corn tumble to 6-month lows on demand fears

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Investing.com - U.S. grain futures were broadly lower during European morning hours on Thursday, with wheat and corn prices trading at the lowest level since July amid concerns over a slowdown in demand for U.S. supplies.

Agricultural commodities came under pressure from broader market risk aversion, as concerns over further budgetary battles facing the U.S. came into focus.

The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, was up 0.45% to trade at 80.27, the strongest level since December 11.

A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.

On the Chicago Mercantile Exchange, wheat for March delivery traded at USD7.5375 a bushel, down 0.25% on the day.

The March contract fell by as much as 0.7% earlier in the session to hit a daily low of USD7.5025 a bushel, the weakest level since July 2.

Wheat prices have been under heavy selling pressure in recent weeks, losing nearly 11% since the beginning of December, as technical selling and concerns over poor export demand weighed on sentiment.

Meanwhile, soybeans futures for March delivery traded at USD13.7700 a bushel, down 1.1% on the day.

The March contract fell by as much as 1.5% earlier in the session to hit a daily low of USD13.7262 a bushel, the cheapest level since November 20.

Soy traders continued to monitor crop conditions in Brazil and Argentina, major South American soy growers.

U.S. soybean exporters are likely to face stiff competition from February from the two South American countries, which are on track to produce near record crops.

Brazil, the world's second largest soybean exporter, is forecast to produce 81 million tonnes this year, up from 66.5 million tonnes in 2012, according to the U.S. Department of Agriculture.

Elsewhere, corn futures for March delivery traded at USD6.8538 a bushel, down 0.85% on the day.

The March contract declined by as much as 1% earlier to hit a daily low of USD6.8538 a bushel, the weakest level since July 2.

The March CBOT corn contract has lost almost 9% in the past five weeks, as worries over slowing overseas demand for supplies from the U.S. have weighed on sentiment.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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