COMMODITIES-Corn plummets to 3-1/2-mth low
July 1 (Reuters) - Corn prices plummeted to 3-1/2 month lows on Friday on a report from the U.S. government which said stocks and sowing areas were both larger than market expectations.
Industrial commodities copper and crude oil came under pressure after surveys showed June factory activity in China grew at its slowest pace in 28 months, while gold's appeal was diminished by Greece's approval of a key austerity package.
U.S. corn futures slid more than 5 percent to $5.81-1/2 a bushel, their lowest since the middle of March, taking the contracts two-day fall to about 10 percent. It was down 4.8 percent to $5.90-3/4 a bushel at 0943 GMT.
The U.S. Agriculture Department (USDA) said on Thursday farmers overcame a cold, rainy spring to plant 92.28 million acres of corn, the second largest area since World War Two.
It also said there were 3.67 billion bushels of corn were in storage on June 1, 11 percent above expected.
"We are in a very volatile period, it corresponds to the news from the United States on the planting, the expected harvest and the stocks," said Koen Straetmans, senior strategist at ING Investment Management.
Straetmans cut his agriculture exposure to neutral two weeks ago from overweight.
"There were rumours that the corn supply situation was improving," he said. "I still think corn is attractive because global stocks are the lowest since the mid 1970s."
Grains prices in recent years have been boosted by strong demand growth from China and other developing market economies, for use as animal feed, while corn is also used to make ethanol.
Commodities posted the largest quarterly loss since the 2008 financial crisis. The 19-commodity Reuters-Jefferies CRB index finished the second quarter 6 percent down.
Brent crude oil LCOc1 on Friday was down 1.1 percent at $111.30 a barrel after data from China raised concerns of weaker fuel demand in the world's second-largest oil consumer.
The oil market is also watching how well the market can absorb the release of emergency stocks as Germany, the Netherlands and the United States sought bids for their crude supplies.
China's official manufacturing purchasing managers' index (PMI) fell to 50.9 points in June from 52 in May, weaker than the expected 51.3, as new orders -- a strong indicator of future activity -- grew at a slower pace than expected.
The survey also dented copper prices as China is the world's largest consumer, accounting for about 40 percent of global consumption estimated at around 21 million tonnes this year.
"(China's PMI)is only just about at an expansionary level (50)," Commerzbank said in a note.
"The monetary measures introduced in recent months to rein in the economy and combat inflation are evidently taking effect. There is thus less need now to introduce any additional measures or tighten monetary policy any further."
Benchmark copper on the London Metal Exchange was trading at $9,455 a tonne from $9,430 on Thursday.
Spot gold hit a six-week low below $1,490 a troy ounce from $1,499.60 late in New York on Thursday.
Gold used as an inflation hedge has been sold alongside oil. A firmer dollar against a basket of currencies , which makes gold priced in the U.S. currency cheaper for holders of other currencies, is another reason behind sales.
"The seeming resolution of the Greece crisis has probably hurt gold, but I think there's enough interest from the Chinese and central banks to sustain it at around $1,500 for now," said David Thurtell, an analyst at Citigroup. (Reporting by Pratima Desai; additional reporting by Rujun Shen and Jan Harvey)
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