Soft red winter (SRW) wheat futures at the Chicago Board of Trade closed lower on Tuesday amid increasing global wheat production and a decline in soya, traders said.
Pressure also came from improving US spring wheat conditions, brokers said. CBOT wheat closed 4 to 5-1/2 cents per bushel lower, with September down 4 at $3.12.
The US Department of Agriculture on Thursday will release its August crop and supply/demand estimates and traders expect it to boost forecasts for this year's world wheat output.
Analysts also expect USDA to increase slightly its estimate for this year's US wheat production. An average of analysts' estimates pegged this year's crop at 2.072 billion bushels, above USDA's July forecast for 2.059 billion.
The analysts' average showed US winter wheat production increasing to 1.476 million bushels from July's USDA forecast for 1.470 billion and spring wheat output is expected to rise to 509 million bushels from the previous 501 million.
USDA late on Monday said the US spring wheat crop was 67 percent good to excellent, up from 65 percent in that category a week ago. The market dropped despite news on Tuesday that Egypt bought a cargo of 60,000 tonnes of US SRW wheat overnight, along with an equal amount of French wheat.
Cash SRW basis bids were mixed, with some Chicago elevators cutting bids in order to avoid low-quality arrivals from the region's recent wheat harvest, cash dealers said. Vomitoxin has been a problem with the Midwest SRW harvest. Technical traders noted the nine-day relative strength index for September moved up to 39 on Monday.
Chartists view an RSI of 30 or less as an oversold market and 70 or more as overbought.
Technical support in the September contract at $3.12 per bushel was broken, driving the contract to a session low of $3.11-1/2 and resistance was at $3.24.
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