GRAINS-Wheat dips, halting rally as weather damage is assessed

* CBOT wheat falls for first time in five sessions

* Market weighs impact of dry U.S. and EU on world supply

* Corn, soybeans decline on benign U.S. crop weather

(Recasts with U.S. markets; updates prices; adds quotes; changes byline, dateline previously PARIS/SYDNEY) CHICAGO, June 21 (Reuters) - Chicago wheat futures fell nearly 2 percent on Wednesday, after hitting their highest level in a year as traders assessed the extent to which hot, dry weather would dent a global market laden with record inventories. Corn and soybean futures declined as forecasts called for benign crop weather in the U.S. Corn Belt. Chicago Board of Trade July wheat settled down 8 cents at $4.64-1/2 per bushel. CBOT July corn ended down 1-1/4 cents at $3.68-3/4 a bushel, and July soybeans fell 9 cents at $9.18-3/4 a bushel. Wheat fell as traders paused to take profits after a rally that lifted the most-active CBOT wheat contract to its highest level in a year on Tuesday, and Minneapolis Grain Exchange (MGEX) spot spring wheat on Wednesday reached $6.60 a bushel, the highest on a continuous price chart since December 2014, before retreating. The rally in wheat this month has been fueled by deteriorating conditions for U.S. spring wheat in the northern Plains and concerns over the impact of a heat wave in France, the European Union's top producer. "The weather in wheat is not bearish, looking at Europe. This is a temporary setback," said Terry Linn with Linn & Associates, a Chicago brokerage, referring to Wednesday's lower close. Corn and soybeans declined on technical selling and the absence of a significant weather threat in the Midwest as the corn crop nears its pollination phase in July. However, CBOT July corn stayed above its June 1 low of $3.67-1/2. "Probably we can hold here because there are some legitimate problems with the corn crop. We are going to have to have all-star weather through pollination and kernel-fill to get the yields up anywhere close to 170 (bushels per acre). I think that's going to keep this market in check," said Jack Scoville, analyst with the Price Futures Group. The U.S. Department of Agriculture has projected the U.S. 2017 corn yield at 170.7 bushels per acre. Traders were also starting to adjust positions ahead of the USDA's closely watched June 30 acreage and quarterly stocks reports.

CBOT settlement prices:

Net Pct Volume

Last change change

CBOT wheat WN7 464.50 -8.00 -1.7 60895 CBOT corn CN7 368.75 -1.25 -0.3 143466 CBOT soybeans SN7 918.75 -9.00 -1.0 94322 CBOT soymeal SMN7 297.90 -3.00 -1.0 46855 CBOT soyoil BON7 31.85 -0.17 -0.5 60786

NOTE: CBOT wheat, corn and soybeans shown in cents per bushel, soymeal in dollars per short ton and soyoil in cents per lb.

(Additional reporting by Gus Trompiz in Paris; Editing by Leslie Adler)