U.S. grain futures tumbled Tuesday as traders booked profits after prices surged last week.

Corn for July delivery, the most actively traded contract, sank 20 3/4 cents, or 2.8%, to a one-week low of $7.33 1/4 a bushel. Wheat and soybean futures also weakened at the Chicago Board of Trade.

Prices sank as traders took profits on spread trades in which they had bought the nearby July corn contract and sold December corn, which represents the crop that will be harvested in the fall. The nearby contract soared 12% last week, while December corn gained 6%.

Prices had climbed on concerns spring planting delays due to rain would push back the harvest, meaning grain users would not be able to secure corn from the next crop until later than usual. Users remain nervous about tight inventories, which are projected to reach a 15-year low this year.

"Other than the spread, I don't see any reason for the July contract to be down," said Rich Nelson, director of research at Allendale, a brokerage in Illinois.

Grain traders will keep a close eye on weather forecasts as farmers need to harvest a large crop to replenish inventories. Corn futures are 6% below a record high reached last month on concerns about strong demand draining supplies.

Goldman Sachs, in a note to clients, warned prices could climb again if the crop is threatened. Yet, the bank reduced its three-month price outlook for corn to $8 a bushel from its April estimate of $8.60.

Goldman Sachs also cut its outlook for soybean prices, noting it was adopting a "tactical wait-and-see approach to developing weather conditions." Soybean prices could suffer if poor weather continues to delay corn planting, causing farmers to shift acres to soybeans from corn.

Yet, forecasts for warmer, drier weather next week fueled expectations that farmers may shift fewer acres to soybeans than previously expected. Analysts said improved weather conditions should allow farmers to make progress planting the corn crop.

"With that hot and dry weather next week, it should indicate that a lot of corn that might not have been planted will be planted," said John Kleist, analyst for ebottrading.com.

Soft red winter wheat for July delivery sank 23 1/4 cents, or 2.9%, to $7.79 3/4 a bushel. Soybeans for July delivery slipped 1 1/2 cents, or 0.1%, to $13.73 1/4 a bushel.

Other Markets

July soyoil settled up 0.5% at 57.48 cents per pound, while July soymeal rose 0.1% to $359.20 per short ton. July oats were down 0.3% at $3.60 a bushel, and July ethanol slid 1.3% to $2.611 a gallon. July rice rose 0.3% to $15.13 per hundredweight.

At the Kansas City Board of Trade, hard red winter wheat for July delivery slumped 2% to $9.12 a bushel. Hard red spring wheat for July delivery stumbled 1.2% to $9.88 3/4 a bushel at the MGEX in Minneapolis.