By Jacob Bunge

CHICAGO--U.S. wheat and corn futures declined Friday in a quiet trading session, as traders remained pessimistic toward big grain supplies despite projections for smaller harvests this year. Soybean futures climbed.

March-dated Chicago wheat futures declined 1.5%, even as U.S. Department of Agriculture analysts forecast domestic wheat acreage to decline by about 8% this year and inventories to fall by about one-fifth by the end of the 2017-2018 crop season, to the lowest level in three years.

The wheat market remains under pressure as large global supplies continue to challenge U.S. wheat's competitiveness on international grain markets. The U.S. dollar, a major factor in pricing U.S. grain, strengthened Friday, rising about 0.14% versus a basket of international currencies tracked by the WSJ Dollar Index.

"The export side of wheat seems to be evaporating," wrote analysts for EDF Man Capital Markets Inc., though recent U.S. export sales of wheat have been relatively good.

USDA analysts at a Washington conference Friday outlined statistical projections for the year ahead, which forecast U.S. farmers would continue their turn away from wheat. Domestic wheat production was forecast to fall 20% to 1.837 bushels, versus 2.31 billion bushels harvested in the 2016-17 crop year.

Farmers have been prioritizing other crops, including corn and soybeans, over wheat in order to eke out better profits at a time when crop prices overall have been pressured by years of massive harvests.

March-dated Chicago wheat contracts declined 6 3/4 cents to close at $4.31 1/4 a bushel Friday, extending the market's decline over the past two weeks to 4%. May-dated Chicago wheat futures declined 1.2% to $4.48 a bushel.

Corn futures settled slightly lower in light trading Friday, as export sales slowed this week. March-dated contracts declined 0.4% to close at $3.64 a bushel, putting the contract 1.2% lower over the past week.

Soybean futures rebounded slightly after declining 1.1% lower Thursday, after the U.S. Department of Agriculture projected record-high acreage to be planted with the oilseeds this year. Contracts expiring in March closed 0.2% higher at $10.13 1/2 a bushel, while May and July contracts settled with similar gains.

--Jesse Newman contributed to this article.

-Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

February 24, 2017 15:54 ET (20:54 GMT)

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