U.S. soybean futures fell Friday, dropping more than 3% to a six week low, as investors liquidated positions in riskier assets amid global economic worries.

Soybeans for July delivery closed down 49 1/4 cents or 3.4% to $14.06 a bushel at the Chicago Board of Trade.

It was a risk-off trading environment, with investors motivated to sell on concerns about euro-zone debt, slowing China economic data and worries about U.S. banks after J.P. Morgan reported $2 billion trading losses Thursday.

"Soy futures were vulnerable to a selloff, after going up for so long and so far without correcting," said Bill Nelson, analyst with Doane Advisory Service in St. Louis, Mo.

Investors were jittery in the face of uncertainty in broader markets, particularly with managed hedge funds holding substantial long positions or bets prices will rise, said Nelson.

Managed funds had established huge bets in soybeans since December amid drought reduced South American crop production and persistent demand from China.

Investors were leery of massive liquidation emerging, fearful of J.P. Morgan taking profits in soybeans and grain commodities to cover losses in other markets, said Mike Zuzolo, president of Global Commodity Analytics and Consulting in Lafayette, Ind.

The market erased strong gains scored Thursday after government forecasters projected a tightening U.S. soybean supply scenario through August 2013.

Good planting weather across the U.S. Midwest that will keep soy seedings moving at a swift pace added to the negative price theme.

Lower than expected Chinese industrial data was another negative influence for traders to absorb. The Chinese data raised concerns about China's economy slowing.

Soybeans have the most sensitivity to China and with a tremendous premium in prices, corrective action helped accelerate the declines, Zuzolo said. China is the largest importer of U.S. and global soybeans.

Overall, traders could not find a good fundamental reason to buy into the market after digesting Thursday's government estimates on supply and demand, said Zuzolo. "Bad global economic news overshadowed strong and secure fundamentals after prices rallied to nearly 4 year highs in the past week," Zuzolo added.

In other markets, corn and wheat futures slumped in unison with soybeans, with broader based investors' risk-off selling weighing on prices. Corn futures losses were also fueled by larger supply estimates from government forecasters Thursday.

CBOT July corn closed 6 1/2 cents lower at $5.81 a bushel, and December corn ended down 2 cents at $5.05 1/4.

CBOT July wheat dropped 4 1/4 cents to $5.97 a bushel, KCBT July wheat rose 7 1/2 cents to $6.10 a bushel, and MGEX July wheat dropped 1 cent to $7.6 1/4 a bushel.

-By Andrew Johnson Jr, Dow Jones Newswires; 312-347-4604; Andrew.johnsonjr@dowjones.com