U.S. corn futures fell nearly 3% Monday, with traders trimming risk premium from the market on hope for active seedings in the western Midwest this week.

Corn for July delivery, the most actively traded contract, ended down 22 cents, or 2.9%, to $7.34 1/2 a bushel. The New crop December contract dropped 8 1/4 cents or 1.2% to $6.61 1/4.

The market erased the premium placed in prices ahead of the weekend, when weather forecasts were promoting thoughts of severe planting delays across the Midwest, said Chad Henderson, analyst with Prime Agricultural Consultants in Brookfield, Wis.

Weather remains the driving force behind price moves in corn, with drier outlooks for the western Midwest this week providing potential for a pick up in the seeding pace for a crop already being planted at half the pace of normal for this time of year.

Corn traders follow weather forecasts closely because farmers need good weather to grow a large crop to replenish precariously tight inventories projected for the end of the marketing year Aug. 31.

Concerns about strong demand draining supplies recently pushed prices to a record high of $7.83 3/4 a bushel.

Earlier corn planting is typically better for final yields, as it reduces the chance the crop will still be developing when the season's first frost hits.

The weather forecast opens the door for farmers to get in the fields, with some farmers say the entire state of Iowa could be planted by the end of the week if the weather cooperates, Henderson said. Nebraska farmers could follow the same course as Iowa, shifting market opinions and taking some of the fear out of traders' minds, Henderson added.

The U.S. Department of Agriculture is scheduled to release its latest estimates of planting progress at 4 p.m. EDT, with traders and analysts expecting the seeding pace in a range of 14% to 18% well below the average of nearly 40% for this time of year.

U.S. wheat futures stumbled, backpedaling from early price gains on spillover weakness from corn. Traders booked profits on initial gains after wheat failed to attract buyers after futures spiked on crop and planting fears, analysts said. The market didn't have enough fresh supportive news to withstand pressure from tumbling corn.

U.S. soybean futures ended modestly lower pressured by spillover weakness from sharp declines in corn and sluggish export demand, analysts said.

Wheat for July delivery ended down 9 1/2 cents, or 1.2%, at $7.91 3/4 a bushel at Chicago Board Of Trade. At the Kansas City Board of Trade, hard red winter wheat for July delivery lost 1.3% to $8.90 1/2 a bushel. Hard red spring wheat for July delivery closed down 1.1% at $9.37 1/2 a bushel at the MGEX in Minneapolis. Soybeans for July delivery dropped one cent, or 0.07%, to $13.93 a bushel.

Other Markets

July soymeal finished down 0.4% at $362.30 per short ton, while July soyoil gained 0.03% to 58.60 cents a pound. July rice jumped 1.8% to $15.19 1/2 per hundredweight. U.S. oat futures ended lower Friday, backpedaling in unison with neighboring grains, as traders reduced risk premium in the markets. Oats for July delivery settled 9 1/2 cents or 2.6% lower at $3.43 a bushel. Ethanol futures stumbled in step with corn futures. July ethanol ended down 0.5% at $2.638 a gallon.