Grain prices dip as Brexit vote stuns investors

PARIS/SINGAPORE - Chicago grain and oilseed futures fell sharply on Friday as they joined a broad retreat in financial markets unnerved by Britain's vote to leave the European Union. Investors ditched equities and commodities in favor of traditional safe-haven assets like gold and the dollar as they came to terms with the outcome of Thursday's referendum, which confounded market expectations this week that British voters would opt to stay in the EU. Reaction to the British vote added pressure on grains that have been weakened this week by rain relief for corn and soybean crops in the U.S. Midwest and an advancing U.S. wheat harvest. "The agricultural markets have been caught in the storm on Brexit," said Luke Mathews, senior risk management consultant at FCStone Australia. "The macro-economic environment is going to be the key driver for all markets including agriculture for a while." The Chicago Board of Trade most-active corn contract fell 2.0 percent to $3.79-1/2 a bushel by 1039 GMT, after hitting its lowest since May 11 at $3.76-3/4 earlier in the session. The contract has now lost over 13 percent this week after liquidation by investment funds triggered by improving crop weather. Soybeans gave up 1.2 percent to $10.88 a bushel. Wheat dropped 1.5 percent to $4.47-1/4 a bushel, with individual delivery months setting contract lows. The dollar climbed more than 2 percent against a basket of currencies, propelled by a plunge in the pound and a sharp drop in the euro, putting pressure on dollar-denominated commodities.