GRAINS-U.S. corn hits 15-month low on demand worry

(Updates after European markets open, pvs SEOUL)

By Sybille de La Hamaide and Miyoung Kim

PARIS/SEOUL, Dec 5 (Reuters) - U.S. corn prices extended their losses on Friday, falling another 1.5 percent after a 4 percent drop overnight, as slumping financial markets deepened worries about recession and dwindling demand for commodities.

The fall on the Chicago Board of Trade and an anticipated drop in local feed demand also pressured European wheat which touched new 2-year lows in early trade.

By 1130 GMT, December corn futures CZ8 dropped 1.5 percent to $3.13-1/2 a bushel, after hitting $3.12-1/2, their lowest since August 2007. The January soybean contract SF9 lost 0.96 percent to $8.07 a bushel, off an earlier 15-month low.

"Most grains are trading below cash costs and it's still hard to tell where the bottom is... The market simply needs some strong fresh lead to break out of this downward spiral," Kim Do-young, a trader at KB Futures, said.

"There's no one saying for sure that this is the bottom and it's time to snap up grains, because everybody is so concerned about weaker demand as a result of the global economic slowdown."

U.S. stock markets, a major driving force of the commodities market in recent months, fell on Thursday and European stocks followed the trend on Friday.

CBOT December wheat WZ8, which plunged 6.6 percent overnight to its lowest levels in over 1-1/2 years, reversed early gains and was trading down 0.75 percent to $4.64-1/2 a bushel, amid prospects of record global crop production.