* Wheat falls as funds sell long positions
* Soybeans hit lowest since August on renewed trade tensions (Adds quotes, updates prices)
LONDON, June 14 (Reuters) - Chicago wheat futures fell on Thursday on long liquidation by funds against the backdrop of surplus supplies while soybean prices sank to a 10-month low as heightened concerns over relations between Washington and Beijing weighed on the market.
The Chicago Board of Trade's most-active wheat contract was down 1.7 percent at $5.08 a bushel by 0958 GMT, having earlier hit $5.05-3/4, its weakest since June 4.
U.S. wheat prices had risen nearly 4 percent on Tuesday after the U.S. Department of Agriculture (USDA) cut its forecast for Russia's crop but lost most of those gains on Wednesday, with overall global supplies still seen as ample.
"While this initial strength was on the back of a downgrade to the Russian wheat crop, the market appears to be coming around to the fact that global inventories are still significant, and in fact the USDA revised higher their 2018/19 ending stock forecast," ING said in a market note.
Dealers said that competition from the Black Sea region is likely to remain tough despite the Russia crop downgrade.
"It is fund liquidation and U.S. wheat needs to drop below $5.10 a bushel to complete with the Black Sea region," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
"The Black Sea wheat market has been pretty steady, but prices are expected to rise with lower production in Russia and Ukraine."
December milling wheat futures in Paris were down 1.50 euros, or 0.8 percent, at 182.75 euros a tonne.
U.S. soybean futures came under pressure after a media report renewed fears that China could hit U.S. soybeans with retaliatory tariffs if Washington follows through on threats to slap duties on Chinese goods.
U.S. President Donald Trump is expected to impose tariffs on Chinese goods as soon as Friday or next week, according to a story published late on Tuesday by news outlet Politico.
The most active CBOT soybean contract was down 0.3 percent at $9.33-1/2 a bushel after touching a 10-month low of $9.31-1/4.
Forecasts for crop-boosting rain in key growing areas of the U.S. Midwest added pressure on both corn and soybeans.
The most active corn contract fell 0.9 percent to $3.72-3/4 a bushel. (Additional reporting by Naveen Thukral in Singapore Editing by Richard Pullin and David Goodman)