Investors also took some profits off the table after the recent rally in futures. Corn and soybean futures had previously rallied by 29% and 20% respectively in the last three weeks, due to worries about declining yield and supply potential resulting from the worst Midwest drought since 1988.
A general lack of fresh news failed to provide a fresh spark to encourage buyers to push values higher, with prices trading at or near record highs, said Chad Henderson, president of agricultural advisory and brokerage firm Prime Ag Consultants in Brookfield, Wis.
Investors are typically cautious about holding bets when going into U.S. Department of Agriculture reports known for causing big price swings.
The USDA is scheduled to release its monthly supply and demand and wheat production reports Wednesday at 8:30 a.m. EDT.
A reduction in both yield and inventory projections could fuel worries about low supplies, while any forecast that strays from expectations could cause volatile price swings Wednesday.
Yet, "after the report it will be all about weather again," Mr. Henderson said.
Weather remains a threat to yield potential across the Corn Belt, but after a sharp rally, many traders saw weather as already factored into values.
The U.S. Corn Belt is clearly still in a pattern of above normal temperatures and below normal rainfall, said Mike Palmerino, meteorologist with Telvent DTN Weather in Boston, Mass.
Seventy percent to 75% of the U.S. Midwest crop belt remains in a very dry pattern, with Illinois, Indiana, and central and eastern Iowa suffering from short to very short soil moisture, Mr. Palmerino added.
U.S. corn crops remain in a world of hurt, and if weather patterns stay dry through the end of the month, concerns about soy crops will heighten.
Soybean crops still have time to recover from dry conditions to produce solid yields with timely rains, said Jack Scoville, vice president of Price Futures Group in Chicago.
However, prolonged stress from dryness will start to produce some irreversible yield losses as the calendar moves closer to August, Mr. Scoville added.
Separately, wheat futures ended lower, dragged down by weakness in corn and pre crop report positioning.
CBOT July corn dropped 14 1/4 cents, or 1.8%, to $7.61 a bushel, and December corn ended down 12 1/2 cents, or 1.7%, to $7.17 1/2.
CBOT July soybeans closed 16 1/4 cents, or 1%, lower at $16.48 3/4 a bushel, and November soybeans ended down 9 1/4 cents, or 0.6%, at $15.38 1/2.
CBOT September wheat dropped 7 cents, or 0.8%, to $8.21 1/4, September KCBT wheat closed 7 1/2 cents, or 0.9%, lower to $8.22, and MGEX September wheat settled down 8 3/4 cents, or 0.9%, at $9.18.
