Corn fell around half a percent while wheat edged lower, after last session's gains, as growing economic concerns pushed down commodities, including oil and metals.
Analytics firm Informa Economics raised estimates for US corn and soybean production while farmers in South America also geared up for a large crop.
"Things were overbought and we are now a seeing a correction as historically these type of rallies end up in a selloff," said one Melbourne-based commodities analyst. "The market is looking at a larger South American crop, slowing Chinese demand and higher production estimates in the US"
The front-month Chicago Board of Trade soybeans climbed to a record top of $17.94-3/4 a bushel earlier this month, while corn jumped to an all-time high of $8.49 a bushel in August as the worst drought in half a century devastated crops across the US grain belt.
On Monday, November soy slid 1.4 percent to $15.98-1/2 a bushel by 0328 GMT, after touching a low of $15.90-1/4 a bushel, its weakest since Aug. 14.
December corn lost 0.5 percent to $7.44-1/4 a bushel and December wheat fell 0.4 percent to $8.94 a bushel.
Grain prices came under further pressure from an overall weakness in other financial markets.
Riskier assets fell on Monday, dragging down Asian shares, copper and oil but the dollar strengthened as investors shifted their focus to weak economic fundamentals while monitoring progress in the euro zone debt bailout scheme.
The dollar index measured against a basket of key currencies rose 0.3 percent, weighing on commodities priced in the greenback like oil, copper and as well as gold.
BEARISH FUNDAMENTALS
Informa pegged US 2012 corn production at 11.093 billion bushels compared with 10.727 billion bushels estimated by the USDA in its September crop report. For soybeans the firm forecast US production at 2.663 billion bushels against 2.634 billion bushels estimated by the USDA.
A slowdown in edible oil consumption, which sent palm oil to a two-year low, is adding to the bearish sentiment in soybeans.
"Slowing European demand for biodiesel is a key headwind for prices," Luke Mathews, commodities strategist at the Commonwealth Bank of Australia, said in a report.
Palm oil prices will fall further this year as slowing economic growth reins in demand for biofuel production, leading to higher stocks at top producers Indonesia and Malaysia, an industry meeting concluded on Sunday.
Investors are turning their attention to soybean production in Brazil and Argentina.
Farmers in Brazil's grain belt jump-started planting after early showers set the scene for what is expected to be a bumper corn and record soy crop, producers and analysts said on Friday.
At the same time, China is likely to reduce soy purchases as it will carry on selling soybean reserves well into 2013 to contain food inflation and ease tight supplies.
The wheat market also came under pressure amid a broad-based weakness in the financial markets but losses were limited by expectations of export restrictions in Russia.
Wheat jumped 2 percent on Friday after Russia's economy minister, Andrei Belousov, said the country may curb grain exports if domestic prices continue to rise.
The economy minister's statement was, however, refuted by the nation's deputy farm minister over the weekend. Ilya Shestakov said that he was surprised by a sudden statement by Belousov that Russia could limit grain exports.