U.S. corn futures plunged more than 6 percent on Thursday and wheat fell 5.6 percent in their steepest slide in 3-1/2 months after the USDA forecast supplies well above trade expectations in its closely watched January crop report. 
   
Soybeans shed 1.7 percent as the USDA also boosted its outlook for end-of-season supplies of the oilseed, sending prices down for the fifth time in the last six sessions. 
   
Corn dropped by its 40-cent daily trading limit, continuing a streak of six straight years in which USDA's January crop report has triggered a limit move, either up or down. 
   
Wheat tumbled as the global stockpile of wheat was forecast to remain near a record high and as U.S. farmers boosted winter wheat seedings to the most in three years. 
   
Crop-boosting rains in drought-hit Argentina added further pressure to grains markets which just last week hit two-month highs. 
   
Corn led grains lower as reports of a corn crop damaged beyond repair in Argentina, the world's No. 2 exporter, had most traders expecting a far less optimistic USDA report. 
   
"The trade was coming in looking for some pretty bullish numbers for the corn market. We did not get that," said Terry Roggensack, analyst with The Hightower Report. 

The USDA estimated U.S. corn quarterly stocks as of Dec. 1 at 9.642 billion bushels, well above estimates for 9.391 billion, suggesting corn use has been far lighter than expected. 
   
USDA only modestly lowered its U.S. corn end-of-season stocks forecast, which remained the smallest in 16 years, but the projection was a whopping 13 percent above the average
analyst estimate.  
   
Global stocks were also projected to grow, contrary to analyst expectations, as USDA only modestly trimmed its view of the Argentine crop and left its Brazilian production outlook
unchanged. 
     
BULLISH EXPECTATIONS 
   
"The market got everyone bullish. We've put almost a dollar on corn since mid-December so the market was loaded with longs coming into the report," said Paul Haugens, vice president for Newedge USA. 
   
"There was a tremendous amount of call buying, bull-call spreading the past three or four days, big bullish plays. But there is plenty of feed wheat around and the recent price rally
was cutting into ethanol and feeding margins," Haugens said. 
   
March corn futures on the Chicago Board of Trade fell 40 cents to $6.11-1/2, a 6.1 percent drop and the lowest since Dec. 22. Daily limits will expand to 60 cents on Friday per exchange rules. 
   
CBOT March soybeans fell for a third consecutive day, dropping 20-1/2 cents, or 1.7 percent, to $11.82-1/2 a bushel.  

Source: Reuters