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GRAINS-Soybeans follow soybean oil lower; wheat and corn retreat

(Updates with closing U.S. prices; adds U.S. corn sale to Mexico)

By Julie Ingwersen

CHICAGO, Nov 16 (Reuters) - U.S. soybean futures fell nearly 2% on Wednesday, anchored by a profit-taking plunge in soyoil and crude oil futures, traders said.

Wheat and corn futures declined on optimism about an extension of a deal to protect Black Sea exports, and as fears eased that the Ukraine war could escalate after a missile hit Poland.

Chicago Board of Trade January soybeans settled down 28 cents at $14.29-1/4 per bushel and December soyoil fell 2.90 cents, or 3.8%, to end at 74.08 cents per lb.

CBOT December wheat settled down 10-3/4 cents at $8.17-1/2 a bushel. December corn ended down 1-1/2 cents at $6.65-1/4 a bushel but stayed inside of Tuesday's trading range.

Soybeans followed as soyoil futures retreated from a five-month high set last week.

"Not anything fundamentally has changed in the bean oil market, but it just got really overdone to the upside. And with the crude oil market down roughly $8 (per barrel) in the last week or so. I think you are seeing profit taking," said Sherman Newlin, an analyst with Risk Management Commodities.

Soyoil sometimes follows trends in crude oil due to its role as a feedstock for biodiesel fuel. Also, rising COVID-19 cases in China, the world's top importer of crude and soybeans, have raised worries about demand for the commodities.

Wheat and corn fell as traders monitored developments in the Black Sea region. A United Nations source on Wednesday said they have reasons to be "cautiously optimistic" on the renewal of the Black Sea grains corridor initiative, which is set to roll over on Saturday unless there are objections.

The U.N.-backed agreement reached in late July allowed grain shipments to resume from certain Ukrainian ports, helping to curb international prices.

Meanwhile, Poland's President Andrzej Duda said the missile that hit Poland killing two people was probably a Ukrainian air defence missile and there was no evidence to suggest the incident was an intentional attack by Russia.

The announcement, which followed similar suggestions by the United States, was likely to ease global concern that the war in Ukraine could spill across the border.

Corn futures drew underlying support from fresh export business as the U.S. Department of Agriculture confirmed private sales of 1,866,900 tonnes of U.S. corn to Mexico.

"We need that kind of sale to continue every week to help the export situation for this corn market," Newlin said. (Additional reporting by Naveen Thukral; Editing by Rashmi Aich, Sherry Jacob-Phillips, Elaine Hardcastle, Jane Merriman and Deepa Babington)

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