Chicago corn futures slid on Wednesday, giving up some of the gains made in the previous two sessions, although concerns over tightening world supplies provided a floor for the market.
Wheat fell for a third consecutive day to hit a four-week low, while soybeans dropped to their lowest in nearly two weeks. "In our view, the USDA's (U.S. Department of Agriculture) supply and demand estimates are actually more bullish than we thought," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
"We will now end up seeing tighter world supplies for corn and wheat next year than the year we are in, so prices should be finding a base and be more likely to go back up again."
The most-active corn contract on the Chicago Board of Trade (CBOT) slipped 0.2% to $6.56-3/4 a bushel, as of 1105 GMT, after climbing 2.3% in the last two sessions.
Wheat lost 1.6% to $6.86-3/4 a bushel, after dropping to its lowest since April 22 at $6.83 a bushel, and soybeans fell 0.8% to $15-62 a bushel, not far from the weakest since 6 May at $15.58 a bushel touched earlier in the session.
The USDA said on Monday morning that private exporters reported the sale of 1.36 million tonnes of corn to China for delivery in the 2021/22 marketing year, the second day in a row the country has booked a purchase of at least 1 million tonnes of the yellow grain.
Higher Global Production
The wheat market is coming under pressure from expectations of higher global production.
Crop scouts on the first day of an annual three-day tour of Kansas projected an average yield for hard red winter wheat in the northern part of the state at 59.2 bushels per acre, up from 46.9 bushels in 2019.
Grain trade association Coceral on Tuesday raised its forecast of this year's soft wheat production in the European Union, citing excellent yield prospects in Balkan countries and Spain.
Soft wheat output in the EU's 27 member states was now projected at 130.9 tonnes, up from 126.6 million estimated in March and 10% above last year's crop of 118.7 million tonnes, Coceral said.
Argentine growers have sold 18.5 million tonnes of soybeans from the current 2020/21 season, after clinching deals for 1.2 million tonnes over the last week alone, the Agriculture Ministry said in a report on Tuesday.
Commodity funds were net sellers of Chicago Board of Trade soybean, wheat, soymeal and soyoil futures contracts and net buyers of corn on Tuesday, traders said.