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Grain futures slump, as wheat drops to 8-week low

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Wheat drops to near eight-week low as US harvest picks up

Corn and soybeans down heading into shortened trading week

Grain traders keep close eye on US weather

Adds market closing prices

By P.J. Huffstutter

CHICAGO, June 17 (Reuters) -Chicago Board of Trade wheat and soybean futures fell sharply on Monday, with wheat at a near two-month low as fund selling pressure rolled into a short holiday trading week, traders said.

Meanwhile, corn futures also fell, as traders turned their focus to U.S. weather patterns early in the growing season.

Traders are monitoring U.S. weather as corn crops approach a key development period and U.S. winter wheat harvesting gathers pace. The U.S. Department of Agriculture (USDA) is scheduled to report on U.S. crop progress later on Monday.

Much of the US Corn Belt is forecast to see at least some rainfall this week, with up to 4 inches in some regions, said Karl Setzer, grain analyst and partner at Consus Ag.

Though the Ohio Valley, the Northeast and the Mid-Atlantic are expected to face an extreme heat wave this week, some of these areas could also see rain fall as heat indexes stretch over 100 degrees Fahrenheit, the U.S. National Weather Service said.

That, in turn, has limited market reaction to the potential soaring temperatures, as well as the fact that recent rains have eased drought concerns much of the U.S. Corn Belt, Setzer said.

"We're not seeing anyone panic this morning at all, because we're not at the pollination stage and the corn crop is only knee-high at best," Setzer said.

"But if these conditions last a week or two longer than expected? That's when you'll see the market react," he added.

The Chicago Board of Trade's most active wheat contract Wv1 ended the day at $5.92-1/2 a bushel, down 21-1/4 cents a bushel and testing the psychologically important $6.00 level. Earlier in the session, it dipped to $5.90-3/4 a bushel, the lowest price since April 23.

Corn Cv1 down 6-1/4 cents at $4.43-3/4 per bushel, while soybeans Sv1 ended 22 cents lower at $11.57-3/4 a bushel.

Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore. Editing by Sherry Jacob-Phillips, Rashmi Aich, David Goodman and Alexander Smith and Aurora Ellis


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