U.S. soybeans plunged to a 19-month low on Tuesday for their worst drop since February in the wake of government reports on Monday that showed larger-than-expected existing supplies and improving conditions for the new crop.
Corn futures also fell, hitting their lowest levels in three years as U.S. farmers harvested a forecasted record-large corn crop and the fourth largest soy crop in history.
The shutdown of the government, including the U.S. Department of Agriculture, due to a budget impasse was also bearish as many traders rely on USDA data for information on crop conditions and export sales.
USDA's possibly last word during the federal government shutdown was an announcement of an export sale of 113,000 tonnes of soybeans sold to top buyer China.
It is common for large importers such as China to purchase commodities following a break in prices. By law, exporters have to report sales 100,000 tonnes or larger -- but USDA is not expected to release news of any such sales during the shutdown.
"Obviously, (the shutdown) is not supporting prices," said Karl Setzer, grains analyst at MaxYield Cooperative in Iowa. "We're in the dark right now -- we don't know who's buying."
Chicago Board of Trade soybeans for November delivery settled 14-3/4 cents, or 1.2 per cent, lower at $12.68 per bushel, earlier touching the lowest level since February 2012 on continuous price charts (all figures US$).
CBOT December corn fell two cents at $4.39 per bushel while CBOT December wheat edged 2-3/4 cents higher to $6.81-1/4.
Corn and soybeans remained under pressure from USDA reports released at midday on Monday stating that supplies of the crops were much larger than analysts anticipated, with the stocks providing a cushion amid the slowest harvest in four years.
"There's a bit of a hangover from yesterday. Those stocks numbers really caught people by surprise," Setzer said.
Then, in another bearish report released later on Monday, the government said the condition of the soybean crop had improved by three percentage points.
"That's a pretty good jump for this time of year and bodes well for farmers and how much they are going to be able to harvest," Citigroup market strategist Sterling Smith said of the soy crop conditions.
The U.S. corn harvest advanced to 12 per cent complete this week, up five percentage points, while soybean harvest progress reached 11 per cent, up eight percentage points, USDA said.
Mostly dry weather favoured field work, but the harvest of both crops was still off to the slowest start in four years, following widespread planting delays in the spring.
Slightly smaller stocks of wheat continued to underpin that market amid strong global demand for U.S. supplies, especially from China and Brazil.
U.S. wheat exporters have already sold more than half the USDA's target of 29.9 million tonnes just four months into the 2013-14 marketing year.
-- Michael Hirtzer reports on grain and livestock commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago.