Prices of agricultural commodities ended sharply lower after the US raised forecasts for major crops, and lowered price expectations, added to pressure from the global financial turmoil.

The US Department of Agriculture raised its forecast for next year's global wheat harvest by nearly 4m tonnes, its estimate of corn output by 2.3m tonnes and added 2.6m tonnes to its projection for oilseed production. The extra crops coupled with weaker markets would cut about 5% from the price US wheat farmers could expect from their crop, with the USDA slicing about 14% from its forecast for oilseed prices at the farm gate, and 16% from corn prices.

"Sharp declines in futures and cash prices over the past month have dramatically reduces price prospects for Corn that was not forward prices," the USDA said.

In Chicago, the revisions exacerbated the sell-off commodities have shared with other financial markets. December wheat lost 41.25 cents, or 6.8%, to 563.5 a bushel, with December soybeans and corn closing limit down.

The USDA attributed its raised estimate for wheat production in the year to next May to raised output from Canadian, Russian and Ukrainian growers, which would more than offset reductions for Argentina, Australia and Kazakhstan, which are struggling with rain shortages. Global wheat stocks would, at 144.4m tonnes, be 4.5m tonnes higher at the end of next May than the USDA forecast last month.

Global corn stocks would be, at 107.8m bushels, 2.2m bushels lower than forecast last month, a decline down in part to lower forecasts for Brazil. "Large carryover supplies from 2007-08 crop, as well as lower world corn prices and higher input costs, have reduced [Brazilian] planting incentives for 2008-09," the department said. However, that would prove little comfort to US farmers, with America's stocks of corn and other coarse grains set to rise, an increase in part down to reduced demand from ethanol plants.

"Reduced gasoline consumption is expected to slow the expansion of blending modestly over the coming months," the report said.

The USDA said that a 2.6m tonne rise, to 420.4m tonnes, in global oilseed output reflected raised hopes for harvests in Canada, Europe and the US, where higher plantings than initially thought more than made up for trimmed yield expectations.