CHICAGO, March 6 (Reuters) - U.S. benchmark wheat futures dropped below $7 per bushel on Monday for the first time in 17 months, pressured by reminders of adequate global supplies and optimism that the safe corridor to export grain from war-torn Ukraine will be extended, traders said.
Corn futures also declined. But soybeans rose as Chicago Board of Trade (CBOT) soymeal futures hit life-of-contract highs on worries about Argentina's drought-hit crops.
CBOT May wheat settled down 13-1/2 cents at $6.95-1/4 per bushel after dipping to $6.93-3/4, the lowest level on a continuous chart of the most-active wheat contract since Sept. 22, 2021.
May corn ended down 2-3/4 cents at $6.37 a bushel while staying above a six-month low set last week. May soybeans finished up 10-1/4 cents at $15.29 a bushel, and the front seven soymeal futures contracts set contract highs.
Wheat sagged as traders focused on exportable supplies from the Black Sea region. Russian wheat prices declined last week, and Turkey's foreign minister said Ankara is working hard to extend the safe shipping agreement that enables Ukraine to export grain, which expires in mid-March.
"An extension would keep Ukrainian grain flowing into world markets at a time when Russian wheat is also being offered cheaply," said Matt Ammermann, StoneX commodity risk manager.
Meanwhile, the Australian Bureau of Agricultural and Resource Economics raised its estimate of its 2022/23 wheat harvest to a record 39.2 million tonnes, from 36.6 million tonnes previously.
U.S. forecasts called for welcome moisture this week in winter wheat areas of the Midwest and Mississippi River Delta, although drought persists in key portions of the Southern Plains.
Corn futures fell despite fresh export business. The U.S. Department of Agriculture confirmed private sales of 110,000 tonnes of U.S. corn to Japan and another 182,400 tonnes to unknown destinations, but the volumes fell short of what some traders expected given widespread chatter last week of China seeking corn, said Terry Linn, analyst with Linn & Associates in Chicago.
"There's a little bit of disappointment for the corn bull," Linn said.
The USDA reported export inspections of U.S. corn in the latest week at nearly 900,000 tonnes, the biggest weekly tally since July, but U.S. soybean and wheat inspections fell below trade expectations.
Traders were positioning ahead of the USDA's monthly supply/demand report on Wednesday, in which analysts expect the government to cut its forecasts of Argentina’s soybean and corn harvests. (Reporting by Julie Ingwersen in Chicago Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore Editing by Marguerita Choy and Matthew Lewis)
