U.S. wheat hits lowest since Sept. 2021; corn, soy also fall

CHICAGO, Feb 27 (Reuters) - Chicago Board of Trade wheat futures dropped 1.6% to their lowest level since September 2021 on Monday as rain across key growing areas during the weekend boosted harvest prospects for the U.S. crop, traders said.

Optimism that the deal allowing grain shipments from Black Sea ports in war-torn Ukraine will be renewed in the coming weeks pressured both corn and wheat. The agreement has increased competition for suppliers of wheat and corn and expires in March.

Export demand for U.S. grain has slumped despite the fighting between key global suppliers Russia and Ukraine.

"It has been a year since the invasion and the market has retraced all those gains it made early in the war and more to the downside," said Brian Basting, commodity research analyst at Advance Trading.

CBOT May soft red winter wheat futures settled down 11-3/4 cents at $7.10 a bushel. Prices bottomed out at $7.05-3/4 a bushel earlier in the session, which was the lowest on a continuous basis for the most-active contract since Sept. 30, 2021.

"Wheat is receiving downward pressure from cheap price offers for Russian wheat in the export market and also forecasts of rain in the U.S. Plains this week," said Matt Ammermann, StoneX commodity risk manager. He added that Russian wheat had been successful in recent international purchase tenders such as Egypt's last week and could be offered cheaply again in tenders this week such as from Turkey.

After the market closed, the U.S. Agriculture Department said 19% of the wheat crop in Kansas, the top production state, was rated good-to-excellent.

CBOT May corn was down 5-3/4 cents at $6.43-1/2 a bushel, its fourth straight lower close.

Export concerns also weighed on soybean futures as the expanding South American harvest provided more supplies for overseas buyers.

CBOT May soybeans were off 6-1/2 cents at $15.12-3/4 a bushel. (Reporting by Mark Weinraub in Chicago Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore Editing by Kirsten Donovan, Matthew Lewis and Richard Chang)