U.S. grain and soybean futures tumbled Thursday as traders took profits following sharp gains in August.

Corn for December delivery, the most actively traded contract, dropped 29 cents, or 3.8%, to $7.38 1/2 a bushel. Soft red winter wheat for December delivery lost 30 1/2 cents, or 3.9%, to $7.61 a bushel. Soybeans for November delivery sank 23 cents, or 1.6%, to $14.34 1/2 a bushel.

Prices sank on the Chicago Board of Trade after corn prices surged 15% last month on concerns that crop damage from hot, dry weather was worse than expected. Wheat climbed 10% in August, while soybeans advanced 7%.

"We came into today very overbought," said Shawn McCambridge, senior grains analyst for Jefferies Bache in Chicago.

Traders wanted to take profits ahead of the three-day holiday week in the U.S., which will see the CBOT closed Monday for Labor Day. Yet concerns about smaller-than-expected harvests remain.

Corn set contract highs earlier this week and could surge again if early harvest results fall short of expectations. The nearby corn contract has dropped about 9% since reaching an all-time high in June on concerns about strong demand draining supplies.

Signs of slowing demand helped pressure prices. Weekly export sales data failed to impress traders, and there was talk livestock producers in Texas had bought wheat from Canada to feed animals. Producers are "looking at everything" to cut costs in the face of high U.S. grain prices, said Don Close, market director for the Texas Cattle Feeders Association.

Other markets

December soyoil fell 1.4% to 58.23 cents per pound, while December soymeal dropped 1.1% to $383.50 per short ton. December ethanol sank 2.6% to $2.70 per gallon, December oats ended down 2.8% at $3.62 per bushel.

Rice futures finished little unchanged, as global supply concerns helped the market avoid the selling that hit the other grain markets. November rice rose 0.1% to $17.96 1/2 per hundredweight.

At the Kansas City Board of Trade, hard red winter wheat for December delivery lost 2.6% to $8.72 a bushel. Hard red spring wheat for December delivery slipped 1.5% to $9.32 a bushel at MGEX in Minneapolis.

--Andrew Johnson Jr. contributed to this article.