U.S. wheat futures are expected to start lower Tuesday on projections foreign demand will ease as Russia lifts a nearly year-long ban on grain exports.

Traders and analysts predict soft red winter wheat for July delivery, the most actively traded contract, will open 15 cents to 20 cents lower at the Chicago Board of Trade. In overnight electronic trading, the contract sank 17 1/2 cents, or 2.1%, to $8.02 1/4 a bushel.

Forecasts for diminished demand are weighing on prices after Russia, once the world's third-largest grain exporter, confirmed it would resume grain exports July 1 amid good harvest expectations. The government halted exports last August when a historic drought devastated its crops.

Russian exports "will shift demand from the U.S. at least in the coming months," said AgResource Company, an agricultural consultancy in Chicago. Russia's wheat exports are expected to climb 150% from last year to 10 million tons, according to data from the U.S. Department of Agriculture.

Yet, losses should be limited as grain users remain nervous about poor weather threatening global output, traders said. Drought has reduced output in the southern U.S. Plains and Western Europe, while the northern U.S. Plains are too wet to plant wheat.

Russia's harvest is expected to offset some of the crop losses in Europe, as both regions export to key buyers in the Middle East. Yet, some traders fear Russia could limit exports again if world wheat prices surge on smaller-than-expected global output.

Grain users are particularly nervous about tightening global inventories of high-quality wheat that can be milled into flour user 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," warned Arlan Suderman, analyst for Farm Futures, an agricultural publication.

Western Europe's largest producer, France, has already declared a state of crisis because of a drought gripping key producing regions. Traders estimate production could cut the country's exportable surplus to just 5 million tons in 2011-12, down from almost 13 million tons in 2010-11.