U.S. wheat futures fell about 3% on Friday, joining a broad sell-off in commodities and equity markets linked to fears of an economic downturn that could dampen demand.
Corn and soybean futures also joined the weakening trend, driven by recession fears and an expanding US harvest. Forecasts call for mostly dry weather in the Midwest for the next two weeks as work accelerates.
Wall Street stocks tumbled, U.S. crude futures fell nearly 6% and the dollar hit a 22-year high, making U.S. grains less competitive globally.
"Everything is interpreted through the lens of a global recession, which negatively affects demand for commodities, which leads to selling ahead of the weekend," Arlan Suderman, StoneX's chief commodity economist, wrote in a client note.
Favorable weather prospects in the Midwest further dampened sentiment, despite the US Department of Agriculture (USDA) forecasting smaller corn and soybean crops than a year ago. In the heart of the US corn belt, the real harvest is just beginning, by September 18, 7% of the corn and 3% of the soybeans had been harvested.
"Lower-than-normal precipitation is expected over the central United States over the next 15 days, which will help corn and soybeans dry out and harvest early," aerospace company Maxar said in its daily weather report.
Traders continue to monitor the conflict in Ukraine. U.S. and European wheat futures hit their highest level since July 11 on Thursday after Moscow's move to mobilize more troops and support for referendums on joining Russia in occupied regions of Ukraine raised concerns about further disruptions to the vital Black Sea grain trade.
In Europe, after a price drop of 3 euros, mill wheat to 346.25 euros, corn to 338.5 euros after a price increase of 0.25 euros, rapeseed to 606.75 euros due to a jump of 1 euro, and feed wheat to 284.2 after a 2.2 pound plus cost in British pounds per ton for the next deadline.