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GRAINS-Chicago corn, wheat, soy drop on favorable crop report

* U.S. corn and soybean sowings progressing quickly

* Rain not such a problem as feared

* U.S. winter wheat crop rating also decent despite rain

(Recasts with European trade, changes dateline) HAMBURG, May 23 (Reuters) - Chicago corn and soybean futures dropped on Tuesday on signs U.S. farmers are making fast planting progress despite concern rain may disrupt sowings. Wheat also fell after a U.S. Department of Agriculture (USDA) report showed the U.S. winter crop was in a stable condition despite worries that saturated fields in key growing areas of the U.S. Plains could damage yields. "We are currently in a volatile market driven by concerns about the rainy weather in the United States," said Matt Ammermann, commodity risk manager at INTL FCStone. "But the latest crop condition and sowing reports from the USDA on Monday did not confirm the worst fears about the impact of rain on U.S. crops and sowings, and markets are down today." Chicago Board of Trade July corn fell 0.6 percent to $3.72-1/2 a bushel at 1012 GMT, having hit three-week highs on Monday after rain in U.S. Midwest grain belts threatened to slow plantings. July soybeans fell 0.5 percent to $9.51-1/2 a bushel, after also rising on Monday because of fears U.S. sowings could be disrupted. July wheat fell 0.7 percent to $4.31 a bushel. The USDA's crop progress report on Monday said U.S. corn planting was some 84 percent complete. Analysts surveyed by Reuters had expected 85 percent. This was up from 71 percent planted in the previous week and around the 5-year average of 85 percent. The USDA estimated that U.S. soybean plantings were 53 percent complete, above analyst forecasts of 52 percent and up from 32 percent finished last week and the 5-year average of 52 percent. "Both corn and soybean sowings showed reasonable progress last week despite the worries about wet weather disrupting work," Ammermann said. "It is remarkable how fast farmers can complete their plantings these days, making full use of their sowing machines if they get even a short time window. "U.S. sowings still have some way to go so concern about the rain is not over yet. But the USDA sowing figures did not confirm the worst fears some had about delays caused by the rainy weather." The USDA rated the U.S. winter wheat crop at 52 percent in good-to-excellent condition against 50 percent forecast by analysts. This compared to 51 percent a week ago. "Wheat condition is also shown by the USDA as pretty decent, again not confirming some earlier fears about the impact of rain," Ammermann said. Grains prices at 1011 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 431.00 -3.25 -0.75% +5.06% 411.25 53 CBOT corn 372.50 -2.50 -0.67% +6.50% 349.54 58 CBOT soy 951.50 -5.00 -0.52% -6.74% 994.43 43 CBOT rice $10.99 -$0.06 -0.59% +12.03% $10.05 74 WTI crude $50.63 -$0.50 -0.98% +6.61% $47.49 70

(Reporting by Michael Hogan, additional reporting by Naveen Thukral, editing by Ed Osmond)