GRAINS-Soybeans extend decline on lower U.S. crush; corn falls

* Soybeans down for 2nd session as U.S. processing below expectations

* Corn futures fall U.S. harvest set to gather pace (Adds quote in paragraph 3, details on fund positions)

SINGAPORE, Sept 16 (Reuters) - Chicago soybean futures lost more ground on Wednesday, with prices weighed down by data showing lower processing in the United States and forecasts of crop-friendly harvest weather in the Midwest.

Corn slid around half a percent, while wheat dropped for a second session.

“Volumes from U.S. harvest are going start climbing, which is bearish signal for prices,” said Phin Ziebell, agribusiness economist at National Australia Bank. “As far as Chinese buying is concerned, there is uncertainty, we are not sure if it will continue to taking such large quantities.”

The most-active soybean contract on the Chicago Board of Trade was down 0.2% at $9.89-3/4 a bushel, as of 0226 GMT, having lost 0.8% in the previous session.

Corn futures gave up 0.5% to $3.64-1/4 a bushel and wheat slid 0.5% to $5.35-3/4 a bushel.

Industry data showing a lighter-than-expected U.S. soybean-crushing pace added to bearish sentiment. The National Oilseed Processors Association said its members, which handle about 95% of all soybeans crushed in the United States, processed 165.055 million bushels of the oilseed in August, a nine-month low that fell below the average trade estimate of 169.5 million.

Dry weather expected in Midwest is likely to help jump-start the harvest of large U.S. corn and soybean crops.

Soybeans hit a June 2018 high of 10.09 a bushel on Monday, underpinned by strong Chinese demand.

The U.S. Department of Agriculture (USDA) on Tuesday confirmed sales of 132,000 tonnes of U.S. soybeans to China, along with sales of soybeans and corn to unknown destinations.

The USDA late Monday rated 60% of U.S. corn in good-to-excellent condition, down from 61% last week, and 63% of U.S. soybeans as good-to-excellent, down from 65% previously.

France’s farm ministry on Tuesday lowered its estimate of this year’s soft wheat harvest due to a further reduction in the crop area, pegging production at 25% below last year’s level after a tough growing season marked by torrential rain and drought.

Commodity funds were net sellers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Tuesday, traders said. (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)