GRAINS-Wheat prices drop 3 pct, edge away from 2-year high

SYDNEY, July 6 (Reuters) - U.S. wheat fell 3 percent on Thursday, snapping a six-day rally in which prices soared more than 20 percent, though concerns over widespread damage across key U.S. producing regions due to hot, dry weather kept the grain near a two-year high. Corn fell more than 1.5 percent in its first daily slide in eight sessions, while soybean prices edged lower. The most active wheat futures on the Chicago Board of Trade had dropped 2.9 percent to $5.43-3/4 a bushel by 0128 GMT. They closed up 0.9 percent on Wednesday, when prices marked their strongest since July 2015 at $5.74-1/2 a bushel. "I'm surprised by the extent of the rally and the market has perhaps got a little bit overextended," said Phin Ziebel, agribusiness economist at National Australia Bank. But traders said weather forecasts had put a floor under prices. Temperatures are expected to reach 100 degrees Fahrenheit (37.8 degrees Celsius) in the northern U.S. Plains by the weekend, threatening wheat production. The most active corn futures declined 1.6 percent to $3.97-1/2 a bushel, after closing up 1.2 percent in the previous session. Analysts said the hot weather may stress crops that are approaching pollination. The most active soybean futures fell 0.2 percent to 9.92-1/4 a bushel, having ended the last session up 1.4 percent. A U.S. Department of Agriculture report on Friday showed that soybean stocks and acreage were below market expectations, underpinning prices for the oilseed.

Grains prices at 0128 GMT

Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 543.75 -16.25 -2.90% -2.03% 473.97 88 CBOT corn 397.50 -6.50 -1.61% +2.32% 383.52 61 CBOT soy 992.25 -2.00 -0.20% +1.17% 940.14 80 CBOT rice 11.91 $0.00 +0.00% +0.76% $11.58 66 WTI crude 45.42 $0.29 +0.64% -3.51% $46.00 53


Euro/dlr $1.134 -$0.001 -0.11% -0.02% USD/AUD 0.7595 0.000 -0.07% -0.07%

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)