US grains fell sharply early on Wednesday, with wheat dropping more than 1 percent to a two-week low, as a surging dollar and mounting concerns over Europe's debt crisis triggered a broad commodities sell-off as investors fled risky assets. Corn and wheat futures declined despite a larger-than-expected downgrade in US crop conditions, while soybeans tumbled to their lowest in a week on news that top soy importer China was unlikely to pass a stimulus package.
"It's a risk-off attitude," said Citigroup grains analyst Sterling Smith. "Pick a country in Europe and pick a problem. The Spanish banking crisis seems to be the most acute issue and that is creating a situation where commodities in general are selling off along with equity markets." Wheat for July delivery was off 9 cents at $6.47-3/4, declining for the second straight day at the Chicago Board of Trade, while July corn was down 6-3/4 cents at $5.55-3/4 and July soyabeans 19-1/4 cents lower at $13.67-1/2.