CHICAGO: Chicago wheat prices fell to a nearly three-week low on Tuesday, as concerns the spread of the Omicron coronavirus variant could slow the global economy drove investors to reduce risk exposure.

The entire grains complex felt pressure early in the session, after Moderna’s chief executive cautioned that COVID-19 shots were unlikely to be as effective against the Omicron variant.

Corn followed wheat lower, while soybeans fell for fifth straight session, as a sharp drop in the crude oil market and good weather for crop development in South America added to the pressure on prices.

“The overwhelming fundamental in the market right now is fear over Omicron and what it could do to demand,” said Jack Scoville, market analyst at The Price Futures Group, who noted that much of the sell-off was caused by funds seeking cover.

“Hopefully, we’ll be seeing some better (export) demand with these weaker prices,” Scoville said. If that happens, “we should be getting to the end of this panic selling and things should stabilize,” he said.

The most-active wheat contract on the Chicago Board Of Trade (CBOT) was down 3.28% at $7.95-1/4 a bushel by 1653 GMT. It earlier fell to $7.90-1/4, its lowest since Nov. 10.

CBOT soybeans gave up 1.45 to $12.23-1/2 a bushel, while corn was down 2.83% at $5.65-3/4 a bushel.

Wheat markets rallied to nine-year highs this month in Chicago and record peaks on Euronext as the possibility of more Russian export restrictions and the risk of rain damage to Australia’s crop fanned fears of tight milling wheat supplies.

Egypt, the world’s biggest wheat importer, also made its largest single wheat purchase in years on Monday after under-buying this season given a surge in prices. But it is not known if Egypt will continue its buying spree or was just taking advantage of a dip in prices.

Global supply worries were eased by signs of a stabilizing US crop, and after Australia’s chief commodity forecaster ABARES revised its official estimate for the 2021/22 crop to a record 34.4 million tonnes.