Grain prices fell Thursday as investors fled risk assets to safe havens like the dollar on renewed concern over the euro zone debt crisis, with wheat slumping over 3 percent, the biggest drop in almost two months. 
Corn futures at the Chicago Board of Trade fell more than 2 percent on the strong dollar and on forecasts for rains next week in Argentina, where dry weather had helped to rally grains
in recent weeks. 
And soybeans turned down, notching the biggest one-day drop since mid-December as corn and soy each reversed advances for three consecutive trading sessions. 
"The outside markets are pressuring everything and people are taking a step back because of the rains in Argentina early next week, they want to see what happens now after the rains,"
said Rich Nelson, director of research for Allendale Inc. 
The dollar climbed nearly one percent to a session high against the yen as investors cited a report showing U.S. private employers added 325,000 jobs in December, easily beating
economists' expectations.  
And the euro slipped to its lowest since September 2010 against the U.S. dollar and an 11-year low versus the yen on Thursday as concerns about the euro zone sovereign funding
pressures and signs of weakness in the region's banks prompted investors to sell the shared currency.  
CBOT wheat for March delivery was down 20-3/4 cents at $6.29-1/4, March corn was down 15 at $6.43-1/2 and soy for January delivery was down 20-1/4 at $12.01-1/4 per bushel.     
Traders and analysts said there was profit-taking in each market and markets were taking a breather after early this week hitting a three-month high in wheat and a two-month high in corn and soybeans. 
"On the first day of the year, you could see the traditional money coming into the markets -- I think it's new money being put to work. But I think the hangover is starting to come back in," said Robert Bresnahan of Trilateral Inc in Chicago. 
"The dollar is going to continue to strengthen, Europe is in trouble. Those issues are going to come back to the forefront." 
Corn and soybeans had been leading the way up through the waning weeks of 2011 on hot and dry weather in Argentina, the world's second largest corn exporter and third largest soybean exporter. 
Despite forecasts of rain early next week in Argentina, concerns remain since the corn crop is pollinating and soybeans will soon be setting pods, both of which are critical growth
stages for the crops. 
"Hot and dry weather will continue through the weekend in Argentina but guidance is quite wet for early next week where good rains appear likely in Buenos Aires on Monday and Tuesday,"
said Joel Widenor, meteorologist for Commodity Weather Group. Widenor said hot and dry weather would return after the early week rains. 
Unrelenting sun in Argentina has scorched as much as a fifth of its corn crop and the drought will start  biting into the country's vast soy harvest unless rains come to the rescue this
month or next, South American crop experts said..
 Also, there are weather concerns in Brazil which has been earmarked to surpass the United States this year as the world's largest soybean exporter. 
Brazil's top corn and second-ranked soy producer Parana state cut sharply its forecasts for production of the two crops in the 2011/12 season after weeks of harsh dry weather, the
state's Rural Economy Department, Deral, said on Thursday.
Brazil also is expected to be the fourth largest producer of corn this year after the United States, China and the European Union.  
The U.S. Department of Agriculture (USDA) will release updated South American production forecasts in its January crop report to be released on Thursday, Jan. 12. 

Source: Reuters