U.S. wheat futures fell to the lower end of a recent trading range, dropping more than 2% on a broad commodity selloff and reports of less fearful crop conditions from the Kansas winter wheat tour.

Wheat for July delivery ended down 21 1/4 cents, or 2.7%, at $7.72 a bushel at Chicago Board Of Trade. At the Kansas City Board of Trade, hard red winter wheat for July delivery dropped 2.3% to $8.77 3/4 a bushel. Hard red spring wheat for July delivery closed down 1.8% at $9.15 1/4 a bushel at the MGEX in Minneapolis.

The market was caught up in commoditywide long liquidation, with investors reducing risk exposure, reflective of the fall in energy and metal futures.

The broader-based commodity selling overshadowed supportive crop concerns, as the threat of smaller production prospects amid declining winter wheat crop conditions and wet weather idling spring wheat seedings in the northern Plains, failed to underpin prices.

The inability of wheat to bounce in the face of poor conditions and planting woes was a bit of a surprise, said Jack Scoville, vice president Price Futures Group in Chicago.

There was nothing fundamental to suggest the sharp break in wheat futures, he added.

However, some analysts say the market was overvalued based on world supplies and demand, and without any bullish surprises from the Kansas wheat tour, futures had little to withstand fund liquidation pressure.

Crop scouts on one route of the Kansas wheat tour saw fields that benefited from rains last week, but still need more moisture after extended drought.

Participants on the tour, sponsored by the Wheat Quality Council, fanned out Wednesday on varied routes from Colby, Kan., in the northwest corner of the state. They saw drought-stressed wheat, as expected, but were surprised by the extent of the benefit recent rains have had on fields.

"The rain that they got last week was a lifeline until the next rain," said Jim Shroyer, an agronomist at Kansas State University.

U.S. soybean futures retreated for the third consecutive day, succumbing to the broad-based selling across commodity markets. The theme of large investors reducing risk in commodities kept pressure on prices, with slower export demand and the threat of some intended planted corn acres shifting to soybeans aided the lower tone, analysts said. Soybeans for July delivery dropped 11 3/4 cents, or 0.9%, to $13.52 a bushel.

U.S. corn futures ended higher, as supply worries boost the market even as other commodities stumbled. Concern about extremely tight supplies this summer fueled gains, along with the sluggish start to the planting season. Farmers unable to plant corn on time will switch to soybeans instead because corn yields drop the later the crop is planted.

Corn for July delivery, the most actively traded contract, ended up 5 3/4 cents, or 0.8%, to $7.29 1/2 a bushel. The New crop December contract climbed 3 cents, or 0.5%, to $6.65 1/4.

Other Markets

CBOT July soyoil settled 0.9% lower at 57.17 cent/pound and July soymeal ended 0.7% lower at $352.50/short ton. U.S. rough rice futures finished limit down as the market was caught up in a broader commodity selloff. Weakness in the cash market adds to the defensive tone, said Scoville. CBOT July rice finished down 50c at $14.89/hundredweight. The daily limit expands Thursday to 75 cent.

U.S. oat futures ended higher. The market was supported by gains in corn and sluggish planting progress. Oats for July delivery ended up 2 cents, or 0.6%, to $3.46 per bushel. Ethanol futures were higher. Ethanol for July delivery closed up $0.012, or 0.5%, to $2.639 per gallon.