Chicago Grain Futures Plunge on World Economy Worries, Falling Oil

Grain futures in the Chicago Board of Trade went sharply down on Monday due to a lower global economy forecast from the World Bank and plummeting oil prices. .

Soybean future for July delivery fell 27.5 cents to 11.515 U.S. dollars per bushel. July corn lost 14 cents, closing at 3.8525 dollars a bushel. July wheat was down 9.25 cents, settled on 5.46 dollars per bushel.

Traders credited grain's weakness to improved growing weather in the Midwest as well as a number of negative outside factors, including a sharply lower crude oil market and a higher dollar along with a sharp break in equity market.

After the past weekend weather brought more moisture to the grain belt, heat coming into these areas this week should contribute more to crop progress, which is bearish to the market.

The World Bank said on Monday that the world economy will shrink by 2.9 percent in 2009, compared with its March prediction of 1.7 percent decline. Meanwhile, it warned that a drop in investment in developing countries will increase poverty.

The updated forecast fueled investors' concerns on the world economy, speculating the demand for agricultural products is going to decrease.

The World Bank's unexpected prediction weighed much on the crude oil in New York with the benchmark contract for August delivery plummeting more than 3 dollars a barrel to a three-week low of 66.67 dollars, also putting much pressure on grains.