GRAINS-Soybeans face 2nd biggest monthly loss in 2 years on record U.S. crop

* Soybeans down 9 pct, 2nd biggest monthly loss since 2016

* Record U.S. production seen keeping lid on soybean market

* Wheat up on Friday on strong demand, down 2 pct in August

(Updates prices, adds detail, quote) SINGAPORE/PARIS, Aug 31 (Reuters) - Chicago soybean futures were on track for their second biggest monthly drop in two years on Friday, having lost more than 9 percent in August as a record U.S. crop weighs on prices. Wheat is set finish the month lower on fund selling, after July's gain of more than 10 percent. On Friday, the most-active soybean contract on the Chicago Board of Trade hit a low of $8.28-3/4 a bushel on Thursday, the weakest since July 16, before rebounding slightly and trading at $8.35 a bushel by 1111 GMT. Soybeans are down 9 percent in August, the biggest monthly fall since July 2016, after a 14 percent drop this June. Wheat has lost 2 percent during August after a rally of more than 10 percent in the previous month. It was trading 1.7 percent higher on Friday at $5.44 a bushel. Corn is down more than 7 percent this month, eroding all the gains from the previous month. "The decline in wheat was largely related to fund selling," said one Singapore-based trader at an international trading company. "We see Chicago prices supported at current levels as millers are back in the market. Egypt had a big tender and there are private deals being reported." Ukraine and Russia may have less milling wheat than previously expected after rain during harvesting hurt the quality of crops, potentially accelerating any curbs on exports from Black Sea exporters, traders and analysts said. Kiev and Moscow have said there is no need to impose restrictions on wheat exports for now, but their agriculture ministries are closely monitoring activity of the main exporters for the 2018/19 marketing season. The soybean market continued to be pressured by fears that African swine fever in China's hog herd might eventually slow demand for soymeal. The disease infected 185 pigs in eastern China's Anhui province, the Ministry of Agriculture said on Thursday, marking the country's fifth case in less than a month.

U.S. Agriculture Secretary Sonny Perdue said China's swine fever outbreak is probably bigger than what has been reported publicly. "This could significantly reduce demand on the world market. China imported 96 million tons of soybeans last season over 60 percent of the total quantity traded worldwide primarily to be turned into animal feed," Commerzbank said in a note. Commodity brokerage INTL FCStone raised its forecast for the U.S. 2018 soybean yield to 53.8 bushels per acre (bpa), up from its Aug. 1 figure of 51.5 and a record high if realised.

The firm trimmed its corn yield estimate to 177.7 bpa, down from 178.1 a month ago but still a record high if realised. The USDA reported export sales of U.S. soybeans in the latest week at 702,400 tonnes (old- and new-crop years combined), toward the low end of trade expectations. Commodity funds were net sellers of CBOT wheat, soybean, soymeal and corn futures contracts on Thursday and net buyers in soyoil, traders said.

Prices at 1111 GMT

Last Change Pct End Ytd Move 2017 Pct

Move

CBOT wheat Mar 544.00 9.00 1.68 427.00 27.40 CBOT corn Mar 358.25 1.75 0.49 350.75 2.14 CBOT soy Mar 835.00 3.50 0.42 951.75 -12.27 Paris wheat Dec 205.00 3.25 1.61 162.50 26.15 Paris maize Nov 184.75 1.75 0.96 163.50 13.00 Paris rape Aug 373.25 -1.00 -0.27 347.75 7.33 WTI crude oil 69.79 -0.46 -0.65 60.42 15.51 Euro/dlr 1.17 0.00 -0.08

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Naveen Thukral; Editing by Sunil Nair and David Evans)