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) Wv1 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 Cv1 fell 0.3% to $4.54-1/2 a bushel and soybeans Sv1 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. MKTS/GLOB