U.S. corn futures slumped to their lowest levels in more than three years on Thursday as the large harvest under way in the United States overshadowed blockbuster export sales.
An influx of grain from the advancing harvest was expected to replenish crop inventories that were drained by strong demand following a historic U.S. drought last year.
Soybean futures also fell under harvest pressure, with some traders expecting the U.S. Department of Agriculture to increase its crop estimates in a monthly production report on Nov. 8. The corn crop is already estimated to be record-sized and the soy crop the fourth largest in history.
"Everybody's expecting big numbers and they'll probably get them," Jack Scoville, president of Price Futures Group, said about USDA production estimates.
Chicago Board of Trade December corn futures closed down 2 cents, or 0.5 percent, at $4.28-1/4 a bushel and hit a session low of $4.27, below a three-year low of $4.28-1/4 reached on Tuesday. The contract lost 3 percent during the month. November soybeans lost 7-1/4 cents, or 0.6 percent, at $12.80-1/4 a bushel, and ended the month down 0.2 percent. December wheat slid 7-1/2 cents, or 1.1 percent, to $6.67-1/2 a bushel, and ended the month down 1.6 percent.
Commodity funds sold an estimated 5,000 corn contracts, 6,000 soybean contracts and 4,000 wheat contracts.
The big corn harvest advancing in the United States prompted the International Grains Council to raise its forecast for global 2013/14 corn output by five million tonnes to 948 million, well above last season's 863 million tonnes.
Global stocks of corn at the end of the 2013/14 season were revised up 4 million tonnes to 152 million, well above the previous year's 126 million.
Harvest progress slowed in the U.S. Midwest on Thursday due to rain but will likely pick up speed again by the weekend, according to Commodity Weather Group.
The U.S. harvest is large enough to absorb strong export sales reported on Thursday, traders said.
China and other big grain importers embarked on a corn and soybean buying spree during the U.S. government's 16-day partial shutdown this month, taking advantage of a lapse in mandatory reporting of their deals, data showed.
During the three weeks to Oct. 24, exporters struck deals to sell more than 4.5 million tonnes of U.S. corn for delivery during the 2013/14 marketing year, which began on Sept. 1, according to the USDA. Analysts had estimated sales at 1.9 million to 2.5 million tonnes.
Soybean export sales for 2013/14 were 4.7 million tonnes, topping estimates for 2.4 million to 3 million tonnes. The USDA reported 1.3 million tonnes of wheat export sales, below estimates for 1.5 million to 2 million.
"The corn sales were probably as big a shock as any of them, but the bean sales were certainly huge," Scoville said. "You have to be kind of disappointed in the markets' overall reaction if you want to be bullish."
The USDA separately reported the sale of nearly 300,000 tonnes of corn to Japan and South Korea. By law, exporters must report promptly the sale of 100,000 tonnes.
Rich Feltes, vice president of research for RJ O'Brien, said he suspected the "frantic pace of U.S. row crop export sales will slow as global buyers wait on next Friday's crop report."