GRAINS-Wheat sinks from peaks on profit-taking; soy, corn firm

CHICAGO, July 5 (Reuters) - U.S. wheat futures sank from multiyear lows on Wednesday in a round of profit-taking amid ideas that potential damage stemming from heat and dryness in the U.S. Plains has already been priced into the market, traders said.

Chicago Board of Trade corn futures were trading steady to firmer, supported by concerns about hot weather stressing the crop as it heads toward pollination. But spillover weakness from the drop in wheat limited the gains.

Soybean futures were firm, with a U.S. Department of Agriculture report on stocks and acreage underpinning prices for the third straight session.

Wheat, however, was on track for its first losing session since June 26. The benchmark CBOT soft red winter wheat contract and the K.C. hard red winter wheat contract rallied to two-year highs early on Wednesday on the back of a surge in MGEX spring wheat futures that peaked at a four-year high.

But traders were content to lock in profits despite forecasts for a heat wave that will push temperatures above 100 degrees Fahrenheit (37.8 degrees Celsius) in the northern U.S. Plains, a key production areas for spring wheat, by the weekend.

"You can only kill that crop one time," said Mark Schultz, chief analyst at Northstar Commodity Investment Co.

At 11:38 a.m. CDT (1638 GMT), CBOT September soft red winter wheat was down 6 cents at $5.49 a bushel, K.C. September hard red winter wheat was 4-3/4 cents lower at $5.54-3/4 a bushel. MGEX September wheat was 8 cents lower at $8.08 a bushel.

Analysts were expecting a USDA report on Wednesday afternoon to show that good-to-excellent ratings for the U.S. spring wheat crop dropped another two percentage points in the latest week.

Good-to-excellent ratings for corn and soybeans were seen falling one percentage point.

CBOT December corn was trading 1 cent higher at $4.00-1/4 a bushel while CBOT November soybeans were up 7-1/2 cents at $9.88-1/4 a bushel.

Soybeans were on track for their seventh gain in the last eight sessions.

Last week, USDA said that farmers planted fewer U.S soybean acres than expected, sparking the biggest one-day rally in soybean futures since May 2016. (Reporting by Mark Weinraub, editing by G Crosse)