GRAINS-U.S. corn to 3-week low on export worries, liquidation
* Market sags after S.Korean feedmaker bars U.S. corn from tender
* Traders adjusting positions ahead of monthly USDA data
* Wheat off as technical selling outweighs export news
* Soybeans lower in choppy trade
(Recasts; updates with U.S. trading and prices; changes dateline from previous PARIS/NEW DELHI, changes byline) CHICAGO, Dec 10 (Reuters) - U.S. corn futures hit a three-week low on Monday, falling for a third straight session as sluggish exports and an expected upward revision to U.S. stocks suggested a recovery in supply after a drought-hit harvest. A higher dollar, which makes U.S. commodities less attractive to holders of other currencies, also weighed on grains as investors were unsettled by news that Italian Prime Minister Mario Monti is to resign. Wheat followed corn down, pressured by technical selling, while nearby soybeans were lower in choppy trade. At the Chicago Board of Trade as of 10:45 a.m. CST (1645 GMT), CBOT March corn was down 5-3/4 cents at $7.31-1/2 per bushel. March wheat was down 11 cents at $8.50 a bushel and January soybeans were down 5 cents at $14.67-1/4 a bushel. Traders noted long liquidation in corn and wheat a day ahead of the U.S. Department of Agriculture's monthly supply/demand reports. Analysts expect USDA on Tuesday to raise its forecast of U.S. corn ending stocks for 2012/13 due to poor export demand. Further pressure stemmed from news that a South Korean feedmaker issued an international tender for corn and feed wheat but excluded corn from the United States, the world's biggest supplier. "Some are saying it's because of U.S. corn quality, not just price," Mike Zuzolo, president of Global Commodity analytics in Lafayette, Indiana, said of the snub. "I think that added another layer of bearishness heading into the (USDA) report, and reinforced the pre-report nervousness about what USDA may say as far as reduced demand," Zuzolo said. Severe drought in the heart of the U.S. Corn Belt this summer contributed to the spread of aflatoxin, the toxic byproduct of a mold that tends to spread in corn in drought years.
CBOT WHEAT HIT BY TECHNICAL SELLING Wheat fell as technical selling and caution ahead of Tuesday's USDA crop report outweighed support from fresh export demand and adverse weather in the U.S. and Argentina. At the CBOT, the most-active March contract fell below chart support at $8.51-1/2, a level that had held for four straight sessions last week. The contract dipped to an intra-day low of $8.46-3/4, its lowest level in three weeks. On the export front, Saudi Arabia bought 295,000 tonnes of hard wheat from the European Union, Australia and the United States, while Iraq bought 350,000 tonnes of wheat from Australia and Romania. Argentina will allow only 4.5 million tonnes of wheat exports this campaign, against 6 million previously planned, in response to a rain-plagued harvest, a local newspaper reported.
USDA confirmed that private exporters sold 115,000 tonnes of U.S. wheat to Egypt, including 60,000 tonnes of soft red winter wheat and 55,000 tonnes of soft white wheat, but some traders said the market had already factored in the news.
Wheat futures on the Kansas City Board of Trade, he noted, posted smaller losses, underpinned by the export news as well as concerns about poor weather in the U.S. Plains winter wheat belt. This year's severe drought, coupled with record warm weather and high winds sweeping across the U.S. Plains, have left the new crop in the worst condition in decades. With no significant improvement soon, many farmers could give up on their wheat acres.
(Additional reporting by Valerie Parent in Paris and Mayank Bhardwaj in New Delhi; editing by Jason Neely and Sofina Mirza-Reid)