CHICAGO, May 6 (Reuters) - Chicago Board of Trade corn futures fell sharply on Monday as a drop in crude oil prices sparked long liquidation from commodity funds and other speculators.

• Oil prices fell sharply to two-week lows on Wednesday as optimism grew about a possible end to the war in the Middle East, with reports the United States and Iran were nearing an initial peace deal. O/R

• A source from mediator Pakistan said the United States and Iran were closing in on an agreement on a one-page memorandum of understanding.

• Traders were monitoring U.S. planting progress and said conditions looked generally favorable, despite rain delays to planting in some areas.

• Traders were waiting for a meeting between U.S. President Donald Trump and Chinese leader Xi Jinping next week, which market players said could result in Chinese purchases of U.S. agricultural commodities.

• Conflict-driven fluctuations in oil prices have strongly influenced grain markets, as corn and soybean oil are widely used as feedstocks for biofuel production.

• CBOT July corn CN26 settled 11-1/2 cents lower to $4.68-1/2 per bushel.