U.S. corn futures fell to a three-month low on Thursday and wheat slid to a 2-1/2 month low, both sinking for a fourth straight day, pressured by technical selling and fund liquidation ahead of a government grain stocks report on Friday.
Soybeans eased, weighed down by spillover pressure from sinking grains, although worries about tight global supplies and signs of improving demand following the recent price plunge limited the decline.
Trading volume was light as investors squared positions ahead of Friday's U.S. Agriculture Department quarterly report on U.S. grain stocks, which could show season-end stocks of corn and beans at an eight-year low.
Traders who bet on further price gains liquidated long positions on chances Friday's data shows stocks are healthier than expected.
"We've seen some support levels breached (in corn and wheat) and we ran into some sell-stops. Trading volume hasn't been all that impressive so it doesn't take any really sizable orders to keep the downward momentum going," said Shawn McCambridge, analyst at Jefferies Bache.
Disappointing export sales data on Thursday, particularly for corn, kept pressure on grains as historically high prices have eroded demand.
The U.S. Department of Agriculture reported net corn export sales last week of just 400 tonnes, the lowest weekly total since a net-negative week of sales nine weeks ago.
A consortium of hog and poultry producers this week confirmed that they were importing 750,000 tonnes of Brazilian corn over the next six months, blaming high U.S. prices and scarce supplies after the worst drought in half a century.
Domestic corn demand has also slumped.
"We saw a drop in the ethanol production this week and we've seen the various livestock reports reflecting continued liquidation in the livestock also. Even though the production number is uncertain, there's a general feel that we continue to ration demand at the current price level," McCambridge said.
Chicago Board of Trade (CBOT) December corn fell 8-1/2 cents, or 1.2 per cent, to $7.16-1/4 a bushel, the lowest for a front-month contract since July 3 (all figures US$). The spot contract earlier breached support at the 100-day moving average on a continuous chart at about $7.15 a bushel.
The benchmark CBOT December wheat contract fell 13-3/4 cents, or 1.6 per cent, to $8.55-1/2 a bushel. The plunge accelerated as sell-stops were triggered as the contract dipped below a mid-August low of $8.57-1/4.
Beneficial rains in the southern U.S. Plains winter wheat belt added pressure.
Commodity funds sold an estimated net 9,000 corn contracts and 4,000 wheat contracts on the day, trade sources said.
Soybeans hovered near previous levels, underpinned by worries about tight global supplies and signs of renewed demand after prices fell to seven-week lows.
"We've seen some profit taking in soybeans, mostly the weak longs that have been flushed out of the soybean complex, but the bottom line is that soybeans have considerable fundamental support," said Karl Setzer, commodity trading advisor at MaxYield Coop in West Bend, Iowa.
"We're hearing better yields as the harvest moves north, but it's not enough to make up for the losses or to compensate for the global shortage we have," he said.
The USDA on Thursday said net export sales of U.S. soybeans last week hit a six-week high of nearly 800,000 tonnes and also reported an additional 110,000-tonne sale to China via its daily reporting system.
CBOT November soybeans shed 2-1/4 cents, or 0.1 per cent, to $15.70-3/4 a bushel after earlier sinking to a seven-week low of $15.57-1/2.
-- Karl Plume writes for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.