SINGAPORE: Chicago wheat retreated on Friday from strong gains posted in the previous session, with the market on track for its biggest monthly drop in two years as the northern hemisphere harvest and improved Argentine planting weather weighed on prices.

Corn and soybeans gained ground, with both markets poised for monthly losses.

"Reports of rains in northern Argentina, allowing for wheat sowing, have contributed to bearish market sentiment, with the USDA World Agricultural Supply and Demand Report Estimates for June increasing its outlook for U.S. wheat production by 17 million bushels from the month prior," according to a report from BMI, a unit of Fitch Solutions.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.2% at $5.78 a bushel, as of 0206 GMT. Corn added 0.3% to 4.23-3/4 a bushel and soybeans gained 0.4% at $11.09-1/4 a bushel.

Wheat prices have dropped close to 15% so far this month, the biggest decline since June 2022. Corn has dropped more than 5%, the most since August and soybeans have given up around 8%, the biggest since May last year.

Harvest of wheat crops in top exporters in the northern hemisphere added seasonal pressure on prices.

Wheat planting for the current harvesting season in Argentina has advanced rapidly over the past week due to recent rainfall over parts in the country's main farmland, the Buenos Aires Grains Exchange said in a weekly report published on Thursday.

The European Commission on Thursday raised its forecast for the European Union's main wheat crop this year and for EU wheat exports both in the current and next season.

The International Grains Council raised its forecast for 2024/25 global corn production on Thursday, driven mainly by an improved outlook for Brazil's crop.

The inter-governmental body's monthly update gave an upward revision to its 2024/25 global corn crop outlook, increasing the forecast by 3 million metric tons to 1.223 billion tons, though it remained marginally below the previous season's 1.226 billion tons.

The wheat market rallied on Thursday, buoyed by strong demand. The USDA reported net U.S. wheat export sales in the week ended June 20 of 667,200 metric tons for 2024/25, above trade estimates of 200,000 to 600,000 tons.

Healthy wheat exports, with Egypt and Algeria among the top importers, were reported on Thursday, indicating strong demand.

Traders were positioning ahead of the release of the USDA data. The agency is scheduled to release its next quarterly stocks report for June, and its 2024 acreage report on Friday at 1600 GMT.

Commodity funds were net sellers of CBOT corn, soybeans and soyoil futures contracts on Thursday, traders said. They were net buyers of wheat and soymeal.

(Reporting by Naveen Thukral; Editing by Rashmi Aich and Sherry Jacob-Phillips)