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GRAINS-Wheat prices firm on fears dry weather could damage crops

* Wheat extends two-day gains to more than 1 pct

* USDA pegs condition of crop below market expectations

* Corn edges higher, soybean prices firm

SYDNEY, June 28 (Reuters) - U.S. wheat edged up on Wednesday to extend two-day gains to more than 1 percent, with concerns that dry weather would hit crops in key producing regions. Soybean prices crept higher to extend gains into a fourth consecutive sessions, while corn firmed. The most active wheat futures on the Chicago Board of Trade had risen 0.5 percent to $4.71-1/4 a bushel by 0337 GMT, having closed up 0.75 percent on Tuesday. "A USDA report suggested significant chunks of the U.S. and, condition," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia. In its weekly U.S. crop conditions report, the U.S. Department of Agriculture rated 40 percent of the spring wheat crop in good-to-excellent condition, down from 41 percent a week earlier and below market expectations of 41 percent.

Continued dry weather is forecast across key U.S. growing regions, threatening further downgrades. "Higher temperatures mean crops in the driest spring wheat regions will begin to suffer more from the lack of soil moisture," said Gorey. The most active soybean futures climbed 0.1 percent to $9.12-1/4 a bushel, after firming 1.2 percent the day before. The most active corn futures rose 0.1 percent to $3.59-1/2 a bushel, having closed little changed in the previous session. The USDA rated 67 percent of the U.S. corn crop in good-to-excellent condition, unchanged from last week but below analyst expectations of 68 percent. Traders were positioning ahead of the USDA's June 30 U.S. sowing acreage and quarterly stocks reports, which have a history of jolting markets. Analysts expected the government to slightly raise its estimate of U.S. 2017 corn plantings and trim is soybean plantings figure.

Grains prices at 0337 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 471.25 2.25 +0.48% +1.24% 458.86 51 CBOT corn 359.50 0.25 +0.07% +0.14% 372.37 29 CBOT soy 912.25 1.00 +0.11% +0.61% 930.09 36 CBOT rice 11.26 -$0.03 -0.27% +0.72% $11.15 51 WTI crude 44.17 -$0.07 -0.16% +1.82% $46.73 47

Currencies

Euro/dlr $1.135 $0.001 +0.10% +1.51% USD/AUD 0.7605 0.002 +0.30% +0.30%

Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential

(Reporting by Colin Packham; Editing by Joseph Radford)