Prices for corn and soybeans each fell about 3% Tuesday, as rains sweeping across the U.S. Midwest raised hopes that crop conditions could stabilize amid the country's worst drought in decades.

While analysts warned that crops will still need more rain to develop healthily, the showers in northern regions of the Farm Belt on Tuesday rattled market participants who had bet that grain and soy prices would continue to rise. The wet weather led them to sell futures to exit their bullish bets, traders said.

Corn for September delivery fell 24 cents, or 2.9%, to $7.90 a bushel at the Chicago Board of Trade, leaving the grain 4.2% below the all-time closing high for the front-month contract set Friday. August soybean futures fell 49 1/4 cents, or 2.9%, to $16.49 1/4 a bushel, and are 6.2% off their record high reached Friday.

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Corn and soybean prices have surged since early June as drought conditions spread across the Midwest, prompting analysts and government forecasters to slash estimates for the harvests this fall.

But futures began declining Monday, as weather forecasters predicted more widespread rain this week than previously expected. Whether prices have peaked, or could still jump higher, depends on the weather in the next few weeks, analysts said.

"Right now, it looks an awful lot like a major top, but these markets have been so volatile," said Doug Houghton, an analyst at Brock Associates, a commodity-advisory firm in Milwaukee. "If the soybean crop continues to deteriorate, you cannot say that we won't come back yet for sure."

Rains this week will likely be heaviest in Minnesota, the Dakotas and Wisconsin, forecasters said, benefiting crops in the upper Midwest. But drought conditions have been more severe in states farther south, and possible showers in Iowa and southern Illinois this week aren't expected to be as heavy as the rains to the north.

While both the corn and soybean crops would benefit from an uptick in rainfall, soybeans in particular need rain in the next few weeks, as soy plants will be setting their pods and filling them out with beans. Favorable weather during that crucial phase will boost yields for the soy crop.