Chicago Board of Trade (CBOT) grains futures closed lower on Thursday with soybean futures hitting a two-month low, pressured by rising government forecasts for a record-large Brazilian soy harvest.

Corn and wheat followed soybeans lower.

The most active corn contract for May delivery fell 5.25 cent, or 1.41 percent, to 3.67 dollars per bushel. May wheat delivery fell 3 cents, or 0.67 percent, to 4.44 dollars per bushel. May soybeans dropped 10.75 cents, or 1.04 percent, to 10.11 dollars per bushel.

In the outside markets, the Brent crude oil market is 1.23 dollars per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 51 points lower.

The U.S. Department of Agriculture in a monthly supply/demand report hiked its forecast of Brazil's 2016/17 soybean harvest to a record 108 million tonnes, from 104 million in February.

The USDA also cut its estimate of U.S. 2016/17 soybean exports, citing competition from the big Brazilian harvest, and consequently raised its forecast of U.S. soy ending stocks to 435 million bushels.

Most analysts are not surprised that the report came out as market-negative.

Jason Ward, Northstar Commodity Investment grain analyst, says that the report showed the same old story for the grain markets, more production and more demand, but more production continues to offset that increasing demand.

"This leaves the grain markets stuck in the same old ranges, or maybe lower ranges. We do think producers and traders will be hard-pressed to build large sales or short positions before the U.S. growing season, but if you are keeping score, the cushion for yield adversity just got a little softer with these widespread production increases," Ward says.

Jack Scoville, The PRICE Futures Group's senior market analyst, says that the big increases in Brazil production appear to be the headlines for the report.

"The soybean estimate is higher than Brazil's CONAB, the government agency, and that is wild," Scoville says. "The U.S. data shows better-than-expected demand for corn but unchanged ending stocks, which I can't figure out."