Investing.com - U.S. grain futures fell sharply on Monday, as risk aversion dominated commodity markets amid heightened fears of a messy Greece exit from the euro zone.
Greeks overwhelmingly rejected conditions for a bailout package from creditors in a referendum on Sunday, adding to doubts over Greece’s future in the euro zone and deepening a standoff with its lenders.
European stock markets sank on Monday and the yields on Italian, Spanish and Portuguese bonds spiked after the "No" camp's strong victory on Sunday.
The euro was down 0.75% to 1.1028, after hitting a session low of 1.0970. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.3% to 96.66, boosted by the weaker euro.
In a surprise move, Greek Finance Minister Yanis Varoufakis resigned on Monday, despite the referendum results. In a statement, Varoufakis said his decision was prompted in part by “some European participants” expressing a desire for his part in any further negotiations to end.
German Chancellor Angela Merkel and French President Francois Hollande were set to meet in Paris on Monday afternoon, while euro zone leaders were expected to hold a conference on Tuesday night to discuss the aftermath of the Greek referendum.
European officials have indicated that they will only continue to finance Greece in return for far-reaching economic reforms.
On the Chicago Mercantile Exchange, US wheat for September delivery plunged 13.98 cents, or 2.37%, to trade at $5.7562 a bushel during U.S. morning hours.
Later in the day, the U.S. Department of Agriculture will release updated crop progress numbers for the week ended July 5.
Nearly 38% of the U.S. winter-wheat crop was harvested as of June 29, compared to 19% a week earlier. Approximately 42% of the crop was harvested in the same week last year, while the five-year average for this time of year is 46%.
The USDA forecast domestic wheat reserves as of June 1 at 753 million bushels last week, up from 590 million on the same date a year earlier. According to the agency, farmers in the U.S. will plant 56.079 million acres of wheat this year, compared with 56.822 million in 2014.
Meanwhile, US corn for September delivery dropped 7.73 cents, or 1.81%, to trade at $4.1988 a bushel. Corn hit a seven-month peak of $4.3060 on July 2 after the USDA estimated that U.S. farmers had planted 88.897 million acres of corn this year, down from 90.597 million last year.
A separate USDA report showed that domestic corn inventories totaled 4.447 billion bushels on June 1, compared with 3.852 billion bushels on that date last year.
Elsewhere on the Chicago Board of Trade, US soybeans for August delivery tumbled 19.2 cents, or 1.85%, to trade at $10.1900. Prices of the oilseed rallied to a seven-month high of $10.5460 on July 1 after the USDA said that U.S. farmers will plant 85.139 million acres of soybeans this year, compared with 83.701 million last year.
According to the USDA, domestic stockpiles at the beginning of June totaled 625 million bushels, up from 405 million a year earlier.
While the soybean and corn stockpile estimates were both higher compared to a year earlier, the results came in below market expectations due to heavy demand for the commodities.
Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.