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GRAINS-U.S. wheat drops to lowest since June 29; weather pressures soy, corn

(Updates with closing prices)

CHICAGO, July 24 (Reuters) - U.S. wheat futures fell to their lowest in more than three weeks on Monday on profit taking as traders said damage from a drought in the U.S. Plains has been fully priced into the market.

Corn and soybean futures also weakened on better harvest prospects as the weather improved in key growing areas of the U.S. Midwest, traders said. Expectations for more storms this week and cooler weather added further pressure.

"The realization of seeing some rain and having some more in the forecasts is really pounding the markets pretty hard today," said Joe Lardy, research analyst at CHS Hedging.

With spring wheat harvesting getting under way, weather damage to that crop was seen as already done and supply pressure coming from advancing harvests of winter wheat in the United States and Europe added to the bearish tone.

The Wheat Quality Council's annual North Dakota tour will provide a close look at the spring wheat crop in the top production state this week. Scouts begin inspecting fields on Tuesday morning.

MGEX spring wheat for September delivery ended down 15-1/4 cents at $7.50-1/2 a bushel. Chicago Board of Trade September soft red winter wheat was 10-1/2 cents lower at $4.88-3/4 a bushel while K.C. hard red winter wheat for September delivery was off 8-1/2 cents at $4.87-1/2 a bushel.

All three wheat markets bottomed out at their lowest prices since June 29 but closed above those points.

CBOT November soybean futures were down 12-1/4 cents at $10.10 a bushel while CBOT December corn shed 2-3/4 cents to $3.90-3/4 a bushel.

Traders shrugged off a U.S. Agriculture Department report that showed bigger-than-expected weekly soybean export inspections of 596,920 tonnes. Weekly wheat and corn inspections were in line with market forecasts.

After some showers last week and over the weekend, more rain is expected across much of the U.S. Midwest this week, while summer heat is expected to ease next week.

"Dry weather has been the big concern and so this (rain) event will ease some fears," said Phin Ziebell, agribusiness economist at National Australia Bank.

Grain markets are awaiting USDA's weekly crop ratings, which will be published after the close of U.S. trading on Monday, for the latest indication of the weather impact, after a slight decline in ratings last week. (Additional reporting by Colin Packham in Sydney and Gus Trompiz in Paris; Editing by Matthew Lewis and James Dalgleish)