SINGAPORE/MILAN - US corn slid to its lowest in nearly six weeks on Monday, while wheat touched an almost 10-week low as the euro zone debt crisis triggered a selloff in commodity markets including oil and industrial metals. There was additional pressure on the corn market with expectations of demand destruction, while wheat suffered under the weight of plentiful global supplies. World stocks and the euro fell on Monday, hit by the lack of progress from finance ministers in solving Europe’s debt crisis at weekend meetings and avoiding a default by Greece. US crude oil and base metals such as copper fell on concerns about the global economy slowdown. “The outside markets are dominating today and this is pushing wheat market fundamentals into the background,” one German trader said. Chicago Board of Trade benchmark December corn fell 0.87 percent to $6.86 a bushel at 1138 GMT, after falling as lows as $6.84-1/4 a bushel, the weakest since Aug. 9. December wheat fell 1.02 percent to $6.81-1/4 a bushel and November soy lost 0.63 percent to $13.47 a bushel. “Grains have moved lower following a pretty significant move lower in the crude oil market and a sharp rally in the dollar index. Quite clearly the risk is coming off the table and grains are getting caught in that,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. “The grain market over the past week has very much been worried about demand destruction in (US) corn and wheat as values in those markets are expensive relative to other origins.” The dollar index , which measures the strength of the greenback against a basket of currencies, rose 0.66 percent, making dollar priced US commodities expensive for overseas buyers. European wheat futures turned negative on Monday, extending a bearish trend seen most of last week, to hit a nearly six-week low, joining the broad sell-off triggered by growing fears about the euro zone debt crisis. Benchmark November milling wheat was down 2.25 euros or 1.14 percent by 1138 GMT, after earlier sliding to 193.00 euros, a level not seen since Aug. 10. Supply/demand news The slump in grains last week was triggered by a bearish US Agriculture Department crop report that forecast a sharp decline in US corn demand that mostly offset an expected drop in production this summer. Signs of lighter-than-expected crop damage from a freeze last week in northern sections of the US corn belt added to bearish sentiment. Temperatures were below freezing in the western US corn belt, but the weather was forecast to warm up in the next few days. The market noted news that the Chinese government will sell an unspecific volume of corn from state reserves to cool record physical prices 0#ASCORN-CN>. A squeeze in domestic supplies and a decline in international prices may prompt the authorities to buy more from the United States, as has happened in the past. Above-average rainfall is more likely in north Australia in the last quarter of 2011, but the chances of a drier or wetter October to December period are roughly equal across much of the grain belts, the country’s bureau of meteorology said on Monday. The chances of receiving above average rainfall in the quarter are between 60 and 75 percent over the Northern Territories, the northern half of Queensland and western and northern parts of Western Australia, the bureau said in its latest seasonal outlook.

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