CHICAGO (Dow Jones)--Chicago Board of Trade corn futures tumbled Monday, undoing most of last week's gains amid outside market pressure and an improved harvest outlook.

December corn ended down 19 3/4 cents to $3.78 per bushel and March corn ended down 19 1/4 cents to $3.90.

Traders said the market was pressured by somewhat drier weather forecasts that could give farmers some opportunity to harvest the crop. But the main factor in the drop was outside markets, traders said, as a stronger dollar and slumping equities weighed.

"It looks to me like we've got a combination of some fund-selling and an improved forecast coming in over the next few days here," said Country Hedging analyst Sterling Smith.

Funds sold an estimated 13,000 contracts. Smith and others said the market was overbought. The market's downward turn prompted some profit-taking following last week's rally, as well as technical selling as the nearby December contract fell back below the 200-day moving average around $3.89.

The trade remains concerned about the slow harvest pace, and is expecting Monday afternoon's crop progress report to show harvest only 20% to 25% complete, up only slightly from 17% the prior week. An extremely wet October has kept farmers out of the fields.

But a lot of traders said that corn's fundamentals don't justify recent high prices, and that the rally is likely hurting demand. Smith said $4 corn was "very rich," given supply-and-demand fundamentals.

Monday's losses were previewed by Friday's weak close technically below $4, a trader said.

"It's a momentum trade," he said. "On Friday, we closed sloppy."

Corn was joined by wheat and soybeans in enduring sharp losses Monday.

The USDA said weekly corn inspections for exports totaled 23.996 million bushels in the week ended Oct. 22, down from 31.448 million the prior week. Analysts had estimated inspections of between 25 million and 35 million bushels.

CBOT oats futures ended lower. December oats ended down 2 3/4 cents to $2.47 1/2 per bushel and March oats ended down 2 3/4 cents to $2.61.

Ethanol futures ended lower. November ethanol settled down $0.014 to $1.971 per gallon and December ethanol closed down $0.041 to $1.893.


-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com