Chicago wheat, corn and soybeans fell on Monday, weakened by a sudden slump in global financial markets.

Grain and oilseeds dropped despite dollar weakness which would be positive for U.S. export sales. Positive U.S. crop prospects also added to the weakness.

Chicago Board of Trade most-active wheat fell 2.4% to $5.25-3/4 a bushel at 1123 GMT.

Corn fell 1.2%, dropping below the $4.00 level to $3.98-1/4 a bushel. Soybeans fell 0.5% to $10.21-1/4 a bushel.

Global stock markets tumbled on Monday as fears of a U.S. recession sent investors fleeing from risk, while wagering that rate cuts would be needed to rescue growth, with the dollar falling against major currencies.

"The big sell-off in world equity and other financial markets today has also pushed down wheat, corn and soybeans as a risk-off atmosphere prevails," said Matt Ammermann, StoneX commodity risk manager. "This is overriding the impact of the weaker dollar which would usually be supportive for U.S. grains and soybeans."

"The market has flipped to assessing the risk of a U.S. recession with the risk financial investors could move into fresh short positions."

U.S. weather was forecast to be largely dry this week, positive for the final stages of the U.S. winter wheat harvest.

The U.S. Department of Agriculture (USDA) is due to report on U.S. crop progress and conditions later on Monday.

"U.S. weather is looking non-threatening to crops this week which is also a weakening factor," Ammermann said. "There are increasing expectations that the USDA crop conditions report will show a positive picture of U.S. corn and soybeans."

The EU wheat harvest, hindered by summer rain, was showing progress.

French farmers harvested 67% of this year's soft wheat crop by July 29, advancing from 41% a week earlier, though behind usual progress after rain disrupted work.

(Reporting by Michael Hogan in Hamburg, additional reporting by Naveen Thukral in Singapore, editing by Rashmi Aich, Sherry Jacob-Phillips and Vijay Kishore)