Wheat falls ahead of USDA forecasts, ending four-day rise

U.S. wheat fell on Tuesday, after four previous days of rises, with adverse weather forecasts in U.S. grain belts containing losses ahead of demand estimates due on Wednesday.

Corn and soybeans also retreated after recent sharp gains.

"We are seeing some profit-taking in wheat, corn and soybeans today after their strong rises...which some market participants seem to be regarding as exaggerated," said Stefan Vogel, head of agricultural commodity markets research at Rabobank. "There is also some risk-avoidance ahead of the USDA (U.S. Department of Agriculture) world supply and demand estimates which will be released on Wednesday."

The Chicago Board of Trade's most active May wheat contract fell 0.7 percent to $4.59-1/2 a bushel at 1109 GMT, after hitting its highest since Feb. 22 on Monday in short-covering after U.S. regulatory data on Friday showed investors had built hefty short positions in wheat.

CBOT May corn fell 0.4 percent to $3.57-1/4 a bushel, while May soybeans dropped 0.6 percent to $8.75-3/4 a bushel. Both had also gained on Monday after news that investors had also built up short positions.

In its previous monthly world supply and demand report on Feb. 9, the USDA forecast record-large global season ending wheat stocks, pushing Chicago wheat futures to their lowest since June 2010.

"I do not expect the USDA to make grave changes in its forecasts on Wednesday, but the report could again bring attention back to large wheat stocks in the U.S. and good soybean harvests in Brazil and Argentina," Vogel said. "However, main market attention will soon be moving to the USDA's forecasts of prospective plantings and grain stocks scheduled for March 31."

Despite edging lower, analysts said unfavorable U.S. weather forecasts still concern the market.

Warm weather means some wheat in the U.S. Plains is emerging from dormancy earlier than usual, making crops vulnerable to damage if weather turns cold.