Chicago Board of Trade (CBOT) corn futures fell to a fresh three-year low on Friday as expectations of a record-large U.S. corn crop took a toll on prices.
Soybeans also fell on seasonal harvest pressure and on technical selling after the bellwether new-crop November contract broke below key chart support at its 200-day moving average.
Wheat ended nearly flat in consolidation trading ahead of the weekend and after the wheat market already fell nearly 3-1/2 per cent for the week, the market's second consecutive weekly decline.
Position-squaring was beginning to surface ahead of the release of the U.S. Department of Agriculture's (USDA) November crop production report next Friday.
"We're looking ahead to next week's report and working in the last half of the corn harvest," said Shawn McCambridge, analyst for Jefferies Bache.
"I think everybody has factored in a corn crop a little either side of 14.0 billion (bushels) now but I think there will be a little more pre-hedge pressure before the weekend," he said.
Analysts and traders are beginning to estimate what the USDA may forecast for 2013 U.S. corn production. The previous record crop was the 13.1 billion bushels produced four years ago.
But according to preliminary results of a Reuters poll, nearly every analyst is pegging this season's crop at 13.8 billion or more, with several estimating the output above 14.0 billion bushels.
Trade sources said Informa Economics on Friday pegged 2013 U.S. corn production at 14.223 billion bushels, up from its previous forecast for 14.010 billion. USDA will release its November crop report on Friday, Nov. 8 at 11:00 a.m. CST (1700 GMT).
"Funds continue to trade a large short position in corn and I think most wheat longs liquidated this week," McCambridge said.
CBOT December corn futures closed 1 cent per bushel lower at $4.27-1/4, November soybeans were down 14-1/4 at $12.66 and December wheat was up 1/4 cent at $6.67-3/4.
Analysts and traders see further declines in corn futures unless significant demand surfaces soon.
The International Grains Council (IGC) raised its forecast for global 2013-14 corn output on Thursday by 5 million tonnes.
The record U.S. corn crop projections come after years of markets lurching from crisis to crisis as global harvests disappointed, leading to panic and uncomfortably high food prices. There was a severe drought in the United States last year.
"We've had almost-ideal weather for the U.S. crop and harvest," said Tom Pugh at Capital Economics.
"This crop certainly gives a buffer — if we were to see another drought next year, the impact wouldn't be nearly as bad. But it really is only a buffer against one drought," he added.
Corn sales during the U.S. government's 16-day partial shutdown totalled 4,555,500 tonnes for the 2013-14 season, nearly twice as large as the high end of trade estimates.
But export activity was providing scant relief for prices.
"Bearish news clearly has the upper hand at the moment," Commerzbank analyst Carsten Fritsch said.
Soybean export sales for 2013/14 were 4.7 million tonnes, topping estimates.
China, the world's largest buyer of soybeans, bought nearly half of the soy (2,112,300 tonnes), and there was a large sale of 550,800 tonnes to an unknown destination.