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GRAINS-Corn drops 1% on ethanol demand concerns, improved weather

* Lower oil demand amid lockdowns to curb ethanol consumption

* Improved South American weather adds pressure on corn, beans

* Wheat drops to lowest in more than two weeks (Adds quote in paragraph 3, details on speculators positions)

SINGAPORE, Nov 2 (Reuters) - Chicago corn futures slid 1% on Monday, as lower oil consumption amid coronavirus lockdowns raised concerns over demand for the grain-based fuel ethanol.

Wheat fell for a sixth consecutive session to its lowest since mid-October while soybeans lost ground after closing higher on Friday.

Improved weather in parts of South America also added pressure on prices.

“The market has lost impetus from the shrinking areas of concern for South America crops,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“And, positive momentum is also a bit shaky. South American weather though remains a variable given the unusual weather patterns created by La Nina.”

The most-active corn contract on the Chicago Board Of Trade (CBOT) gave up 1% at $3.94-1/2 a bushel, as of 0322 GMT, after closing unchanged in the previous session.

Wheat was down 0.5% at $5.95-1/4 a bushel, after hitting its lowest since Oct. 14 at $5.93 a bushel earlier in the session and soybeans slid 0.8% at $10.47-3/4 a bushel.

Oil prices fell more than 3% on Monday on worries a swathe of coronavirus lockdowns across Europe will weaken fuel demand, while traders braced for turbulence during the U.S. presidential election week.

Around 40% of U.S. corn is used in making ethanol, which competes with fossil fuel for market share.

Global coronavirus cases surpassed 500,000 last week with Europe crossing the bleak milestone of 10 million total infections. The United Kingdom is grappling with more than 20,000 new cases a day while a record surge of U.S. cases is killing up to 1,000 people a day.

The U.S. Department of Agriculture (USDA) on Friday confirmed private sales of 121,500 tonnes of U.S. soybeans to unknown destinations.

Grain and oilseed prices have rallied in recent weeks amid worries over weather across key exporting regions.

Large speculators raised their net long position in CBOT corn futures in the week ended Oct. 27, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, cut their net long position in CBOT wheat and raised their net long position in soybeans.

“Speculators’ overall optimism about Chicago-traded grains and oilseeds rose last week to within striking distance of record bullishness for any time of the year, and that largely owed to strong buying in corn,” Karen Braun, a market analyst for Reuters, wrote in a column.

“But increasing pandemic fears and improving crop weather went against bulls late in the week.”

U.S. soybean crushers likely processed 5.140 million short tons of soybeans in September, or 171.3 million bushels, according to the average forecast of eight analysts surveyed by Reuters ahead of a monthly U.S. Department of Agriculture (USDA) report. (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)

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