Wheat falls below $7/bushel on hopes for Ukraine corridor extension

CHICAGO, March 6 (Reuters) - U.S. benchmark wheat futures fell 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 followed wheat lower while soybeans rose as Chicago Board of Trade soymeal futures hit life-of-contract highs on worries about Argentina's drought-hit crops.

As of 12:50 p.m. Central, CBOT May wheat was down 11-3/4 cents at $6.97 per bushel after dipping to $6.93-3/4, the lowest on a continuous chart of the most-active wheat contract since Sept. 22, 2021.

May corn was down 1-3/4 cents at $6.38 a bushel while May soybeans SK3 were up 9-3/4 cents at $15.28-1/2 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.

"Wheat is being undermined today by intensifying market expectations that Ukraine's safe shipping agreement will be extended," said Matt Ammermann, StoneX commodity risk manager. "An extension would keep Ukrainian grain flowing into world markets at a time when Russian wheat is also being offered cheaply," he added.

Meanwhile, the Australian Bureau of Agricultural and Resource Economics raised its estimate of its 2022-23 wheat harvest to a record 39.2 million metric tons, from 36.6 million metric tons previously.

Corn fell despite fresh export business. The U.S. Department of Agriculture confirmed private sales of 110,000 metric tons of U.S. corn to Japan and another 182,400 metric tons to unknown destinations, but the volumes fell short of what some traders expected, given widespread chatter last week of China seeking corn.

"I think there's a little bit of disappointment for the corn bull," said Terry Linn, analyst with Linn & Associates in Chicago.

The USDA reported export inspections of U.S. corn in the latest week at nearly 900,000 metric tons, the biggest weekly tally since July, but weekly inspections of U.S. soybeans and wheat fell below trade expectations.

Traders were positioning ahead of the USDA's monthly supply/demand report on Wednesday, March 6, in which analysts expect the government to cut its forecasts of Argentina’s soybean and corn harvests.

(Reporting by Julie Ingwersen; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by Marguerita Choy)