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NEW YORK - Wheat declined on Tuesday after a U.S. government report showed that winter crop conditions improved reducing concern that global inventories will decline.

Wheat futures for July delivery dropped by 3.9 percent or 32.5 cents to $8.085 a bushel on the Chicago Board of Trade.

Wheat futures have declined by 62 percent from last year to as low as $13.495 a bushel on Feb. 27, after adverse weather damaged crops, increasing grain demand.

The U.S. Department of Agriculture (USDA) said that about 46 percent of the winter crop was rated good as of April 27, compared with 45 percent a week earlier.

The USDA said that about 45 percent of the crop in Kansas, the largest winter wheat producing state, was rated good while Oklahoma, the second largest producer had 55 percent ratings.

Global wheat supplies were forecast to decline to 112.5 million metric tons in the year ending May 31.

The International Grains Council said that worldwide wheat production will increase by 6.8 percent in the year beginning July 1, to 646 million tons.

The decline of wheat prices was partly attributed to a statement from Egypt, the world's second largest wheat importer after Brazil, which indicated that the nation will plant more wheat and barley to reduce the need to purchase the grains on the world market.