U.S. wheat futures tumbled Tuesday, as the U.S. harvest produced fair initial results and traders worried that a recent rally had a weak foundation.

Chicago Board of Trade futures for July delivery fell 23 1/4 cents, or 3.4%, to $6.56 3/4 a bushel. Kansas City Board of Trade July wheat fell 22 cents to $6.78 a bushel.

Wheat prices have been volatile in the last several weeks. Futures declined in early May amid expectations for high yields in the U.S. harvest of winter wheat, which is now in its early stages, but soared later in the month as concerns mounted about dry weather in the Great Plains and other key world production regions, including the former Soviet Union.

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Tuesday's losses were largely the result of more traders beginning to feel the surge, which carried front-month futures to eight-month-high levels, was built too heavily on short-covering, in which market participants sold futures to exit souring bets prices would fall.

"It went up a dollar; that's way too much," said Sid Love, an analyst at Kropf & Love Consulting, an Overland Park, Kan., agricultural advisory firm.

Concerns that short-covering couldn't sustain high prices weighed on futures Tuesday. The extent of short-covering was underlined by government data issued Friday, which showed that managed funds, including hedge funds, as of May 22 had eliminated their large net short position of a week earlier to hold instead a small net long position in CBOT wheat.

Wheat futures also fell because initial yield reports from the wheat harvest in Kansas, the top U.S. state for winter-wheat production, reflected less damage to crops there than some analysts had expected after the hot and dry weather of the last few weeks.

"The wheat coming out of Kansas so far isn't what it could've been, but it's certainly not bad," said Jim Gerlach, president of A/C Trading Co., a Fowler, Ind., commodities brokerage.

The state's picture is mixed. Southeast Kansas is seeing high yields, but the state's main crops lie elsewhere, said Kansas Wheat Commission spokesman Bill Spiegel. Meanwhile, drought- and heat-afflicted southwest Kansas is seeing yields around 20-30 bushels an acre, below a rough average of 35 to 40 bushels an acre, Spiegel estimated.

"I would say it's an average crop so far," with less than 10% of the harvest complete, he said.

Also Tuesday, corn futures fell to a fresh 17-month closing low for the front-month contract as expectations for substantial rain this week in the corn belt eased worries about spotty dryness there. The drop in wheat also weighed on corn, as did concerns that U.S. corn has become less competitive in export markets due to falling prices for freshly harvested corn from Brazil and Argentina.