NEW YORK, Oct 10 (Reuters) - Chicago wheat futures extended losses on Tuesday that began in overnight trading following a short-lived rally on the back of rising tensions in the Middle East, as lower prices and hefty supplies in Russia kept attention on export competition.
The most-active Chicago Board of Trade wheat futures were down more than 2.5% at $5.57 a bushel, pressured by forecasts of larger Russian grain crops and exports.
Wheat climbed in the prior session amid a jump in crude oil prices on a spike in violence between Palestinian militants and Israeli forces.
"We're pulling that geopolitical premium that crude oil gave us yesterday," said Mike Zuzolo of Global Commodity Analytics in Atchison, Kansas.
Traders on Tuesday reported Egypt's state grains purchaser negotiated the sale of some 480,000 tons of Russian wheat in private talks. News of that purchase comes as traders adjusted positions ahead of the U.S. Department of Agriculture's (USDA) Oct. 12 World Agricultural Supply and Demand Estimates (WASDE) report.
"I think the wheat market is doing a dress rehearsal ahead of the WASDE report, because they assess we may see a bigger domestic end stocks report," said Zuzolo.
Soybean futures firmed, up about 0.3% higher at $12.68 a bushel at 11:41 a.m. CDT (1641 GMT), rebounding from an overnight low of $12.54-1/4, their lowest price since December, 2021.
Some of the price rebound could be attributed to a drop in the U.S. dollar, which hit its lowest since Sept. 29, against a rise in the Brazilian real. Brazil is the world's top soybean exporter, followed by the United States.
Corn prices fell, dropping about 0.7% to $4.84-1/2 a bushel, as traders await a weekly USDA update on the current corn and soybean harvest across the American farm belt, expected later on Tuesday. (Reporting by Zachary Goelman in New York, Gus Trompiz in Paris and Peter Hobson in Canberra; editing by Jonathan Oatis)
