U.S. wheat futures tumbled Tuesday after Russia confirmed it will lift a nearly year-long ban on grain exports.

Soft red winter wheat slid 37 1/2 cents, or 4.6%, to a one-week low of $7.82 1/4 a bushel at the Chicago Board of Trade. Corn and soybean futures also dropped.

Prices sank as traders projected Russia, formerly the world's third-largest grain exporter, will steal business from the U.S. once it resumes exports July 1. The government halted exports last August when a historic drought devastated its crops, but it expects farmers will bring in large harvests this year.

Russia was expected to restart exports. Still, the announcement fueled fears of reduced demand because Russian exporters "tend to be the low price leaders in the world wheat trade," said Dale Durchholz, analyst for AgriVisor, an agricultural advisory firm in Illinois. That indicates U.S. prices need to drop to become competitive on the world market.

The selloff was a turnaround from last summer, when the shocking export ban sent prices surging. Russia's drought was the start of a string of global weather problems that hurt grain output, including heavy rains in Australia and extreme dryness in the U.S. southern Plains.

Wheat futures reached 2 1/2-year highs in February as foreign buyers snapped up supplies from the U.S., the world's top grain exporter, and have since pulled back 12%. Buyers were unable to look to Russia for wheat at the time, as the export ban was in place.

With the ban removed, Russia's wheat exports are expected to climb 150% from last year to 10 million tons, according to forecasts issued earlier this month by the U.S. Department of Agriculture. Total grain exports could reach 15 million tons, Russia's Deputy Prime Minister Viktor Zubkov said, according to local news agencies.

"A lot of numbers are being thrown around about how big their exports could be," said Doug Berman, broker for MF Global in Chicago.

Yet, grain users remain concerned about poor weather reducing global output. The U.S. southern Plains and Western Europe are struggling with drought, while farmers in the U.S. northern Plains and Canada haven't been able to plant wheat because of excessive rains.

Grain users are particularly nervous about tightening global inventories of high-quality wheat that can be milled into flour used to make bread. The wheat that will be exported out of Russia will likely be of lower quality, doing little to calm fears about supplies.

"Some in the trade question how Russia will react if wheat prices continue to rise, fearing that it might cap exports again to control food inflation ahead of this year's elections," said Arlan Suderman, analyst for Farm Futures, an agricultural publication.

Corn futures ended down 11 cents, or 1.4%, at $7.47 1/2 a bushel. Soybean futures slipped 3 3/4 cents, or 0.3%, to $13.76 a bushel.

Other Markets

Wheat futures traded in Kansas City and Minneapolis came under heavy pressure as well. At the Kansas City Board of Trade, hard red winter wheat for July delivery dropped 3.7% to $9.08 a bushel. Hard red spring wheat for July delivery slid 3% to $10.25 a bushel at the MGEX in Minneapolis.

At the CBOT, July soyoil ended down 0.2% at 58.49 cents per pound, and July soymeal dropped 0.1% to $355.30 per short ton. July rice stumbled 0.8% to $15.06 per hundredweight. July oats edged up 0.8% to $3.86 a bushel, while July ethanol shed 0.6% to $2.645 per gallon.