Wheat and corn declined for a second day, as investor demand for commodities waned after U.S. lawmakers failed to agree on cutting the deficit and concerns increased that Europe’s sovereign debt crisis may spread. September-delivery wheat lost as much as 3 percent to $6.2025 a bushel on the Chicago Board of Trade, before trading at $6.2675 at 11:04 a.m. Singapore time. December-delivery corn slipped 1.5 percent to $6.235 a bushel. “The price action that we’re seeing in the grains market is likely the result of the continuing risk-off mood that is engulfing the wider financial market,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. Italian bonds sank and the country’s stocks fell to the lowest in two years yesterday. Warnings by Moody’s Investors Service and Standard &Poor’s over Italy’s ability to finance its debt, coupled with infighting in Silvio Berlusconi’s government over proposed budget cuts, fueled the Italian sell-off. In the U.S., President Barack Obama urged Republican leaders to compromise on their opposition to tax increases and achieve “the largest possible deal” to cut the federal budget deficit. Obama is pressing lawmakers to reach an agreement to raise the $14.3 trillion U.S. debt-ceiling before the government exhausts its borrowing authority on Aug. 2. All these “have certainly resulted in just about all risk assets selling off over the past 24 hours,” Mathews said. “It looks like that theme has continued today.” The U.S. Department of Agriculture may also raise today its estimates on the nation’s corn and wheat stockpiles, helping push global supplies higher, Mathews said. That will add to the bearish sentiment on the grain market, he said. The agency is scheduled to release its estimates on agricultural supply and demand, including corn, wheat and soybeans at 8:30 a.m. in Washington today. November delivery soybeans fell for the first time in seven sessions, losing 0.5 percent to $13.40 a bushel in Chicago. -- With assistance from Phoebe Sedgman in Melbourne and Mike Dorning and Heidi Przybyla in Washington. Editors: Thomas Kutty Abraham, Ovais Subhani To contact the reporters on this story： Luzi Ann Javier in Singapore at ljavier@bloomberg.net To contact the editor responsible for this story: James Poole in Singapore at jpoole4@bloomberg.net

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