CANBERRA, May 29 (Reuters) - Chicago wheat futures fell

on Friday and were on track to end the week down 4% after a

rally prompted by U.S. crop losses faltered and traders

repositioned ahead of the Northern Hemisphere harvest season.

Corn futures also dipped and were headed for a 1.8% weekly

loss, while soybeans inched higher and were flat through the

week.

FUNDAMENTALS

* The most-traded wheat contract on the Chicago Board of

Trade (CBOT) was down 0.6% at $6.20-1/4 a bushel, as of

0104 GMT, and down 10% from a peak in mid-May.

* CBOT corn fell 0.3% to $4.54-1/2 a bushel and

soybeans edged 0.1% higher to $11.95-1/4 a bushel.

* All three contracts have been rising in recent months but

remain far below highs reached after Russia invaded Ukraine in

2022.

* Wheat was holding just above its 50-day moving average,

which provided technical support.

* Northern Hemisphere nations produce most of the world's

wheat and their harvest period is just beginning. While the U.S.

crop has suffered from widespread drought, many other countries

are on track for good harvests and have well-stocked

inventories.

* Unverified rumours are circulating in the market that

China will lower its tariffs on U.S. grain and start buying. But

despite the U.S. announcing earlier this month that China had

agreed to buy $17 billion more U.S. farm goods, no confirmation

has yet come from Beijing.

* "Wheat is caught between the 'China lowers tariffs' rumour

and falling export prospects through uncompetitive export

values," StoneX analyst Bevan Everett wrote in a note to

clients.

* Traders also have their eye on U.S.-Iran peace talks.

Apparent progress towards a deal has lowered oil prices, putting

downward pressure on biofuel and its feedstock, and raising the

prospect of improved fertiliser supply from the Gulf.

* Brazil's wheat imports are forecast to grow this year as

its own crop area declines due to higher costs linked to the

Iran war and uncertainty over the impact of an expected El Nino

weather event, industry experts said.

MARKETS NEWS

* U.S. stocks advanced on Thursday and European shares pared

their losses following reports that the United States and Iran

may have reached an agreement to extend the ceasefire and launch

negotiations.