A wave of profit taking has weighed on U.S. grain markets, with corn posting its steepest decline in nearly three weeks after a multi-week rally fueled by geopolitical and weather risks. The most-active corn contract on the Chicago exchange fell as much as 1.8% on Wednesday, marking its largest intraday drop since August 13. Wheat and soybeans followed suit, moving lower in tandem, as investors locked in gains following the recent surge.

The pullback comes after a period of significant price appreciation driven by escalating attacks on Black Sea ports and vessels, alongside global heatwaves threatening crop yields. These supply concerns had pushed grain prices sharply higher. The Bloomberg Agriculture Spot Index, which tracks ten major agricultural products, posted a monthly gain of more than 13% in August, its largest single-month advance since July 2012. This surge was accompanied by a substantial buildup in bullish positions, with data from the U.S. Commodity Futures Trading Commission showing that hedge funds' corn bets had reached a four-year high last week.

According to Joe Davis, director of commodity sales at International Futures LLC, the notable expansion of speculative positioning has made the market susceptible to profit-taking moves like the one seen recently, particularly after such a rapid accumulation of long positions. Davis added that despite Wednesday's significant decline, the overall market outlook remains tilted toward a bullish bias. Corn futures settled 1.6% lower at $5.37 per bushel. Wheat fell 1.8% to $7.68 per bushel, while soybeans declined by 1.1%.