GRAINS-Corn drops 1 pct on poor exports, stronger dollar

* Lower corn futures pull wheat down

* Soybeans retreat from 1-month peak as corn sinks

* Stronger dollar, weaker crude oil weigh down grain markets

(Adds details, quotes, updates prices) CHICAGO, Dec 6 (Reuters) - U.S. corn futures fell 1 percent on Thursday on concerns about sluggish demand after a report showed last week's export sales were well below expectations. The sinking corn market dragged wheat prices lower for the fifth time in six sessions and pulled soybeans back from an earlier one-month high despite their strongest export sales in nine weeks. A nearly $2-a-barrel drop in crude oil and a stronger U.S. dollar, which increases costs for buyers holding other currencies, further weighed on grains. "We have a market here that is fighting a severe headwind," said Sterling Smith, futures specialist at Citigroup. "The noticeable strength in the dollar is working against all of the markets, taking away soybeans' gains and leaving an unattractive chart path. Corn started out weak after the disappointing export sales and, coupled with a strong dollar, it made things really difficult in the grain room today," he said. The U.S. Department of Agriculture reported net export sales of corn last week at 47,400 tonnes for the current and next marketing years, well below trade forecasts for 350,000 to 550,000 tonnes and the lowest figure in eight weeks. Export sales of all classes of U.S. wheat were near the low end of trade expectations at 353,100 tonnes. "Demand is falling faster than supply in the corn and the wheat. The weekly export sales took the wind out of the sails and caused yesterday's technical rally in the beans and commodities in general to stall out today," said Mike Zuzolo, president of Global Commodity Analytics. Chicago Board of Trade March corn fell 8 cents, or 1.1 percent, to $7.49-3/4 per bushel by 1:22 p.m. CST (1922 GMT), the steepest decline for the actively traded contract in 3-1/2 weeks. CBOT March wheat shed 2-1/2 cents, or 0.3 percent, to $8.57-1/2 a bushel. CBOT January soybeans rose 6 cents, or 0.4 percent, to $14.86-1/4 per bushel after earlier peaking at $14.91-1/2 a bushel, the highest since Nov. 9.

SOYBEAN DEMAND Robust export demand kept a firm floor under nearby soybean futures, but declining concerns about South American production weighed on back months as Brazil's government reaffirmed its forecast for a record-large crop. "The trade feels the South American weather is not hurting the crop at all, giving them the freedom to sell the back end, but the export sales were so strong they are not inclined or willing to sell the old-crop," Zuzolo said. USDA said U.S. soybean export sales last week topped 1.1 million tonnes, the most in nine weeks. But soy product export data was mixed as soymeal sales notched a three-year high, while soyoil sales were the lowest in six weeks. Traders said market talk suggested China, the world's largest consumer of the oilseed, had acquired up to six cargoes of U.S. soybeans this week from sellers in the Pacific Northwest, and that it would soon seek more volumes.

Prices at 1:28 p.m. CST (1928 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 745.75 -7.50 -1.0% 15.4% CBOT soy 1485.25 6.00 0.4% 23.9% CBOT meal 457.20 4.00 0.9% 47.8% CBOT soyoil 50.34 -0.32 -0.6% -3.4% CBOT wheat 840.00 -2.25 -0.3% 28.7% CBOT rice 1544.00 -11.50 -0.7% 5.7% EU wheat 267.50 -1.25 -0.5% 32.1%US crude 86.28 -1.59 -1.8% -12.7% Dow Jones 13,051 17 0.1% 6.8% Gold 1698.50 5.09 0.3% 8.6% Euro/dollar 1.2956 -0.0110 -0.8% 0.1% Dollar Index 80.2890 0.5150 0.7% 0.1% Baltic Freight 990 -32 -3.1% -43.0%

(Additional reporting by Colin Packham in Sydney, Sybille de La Hamaide in Paris; Editing by Jim Marshall and Bob Burgdorfer)