July 6, 2015 / 1:05 PM / 2 years ago

GRAINS-Sharp drop on lighter Midwest rain, global investor unease

* Wheat loses as much as 3 pct, corn/soy around 2 pct

* Firm dollar, worries over Greece, China sap commodities

* Less rain than feared in Midwest eases U.S. crop concerns (Updates with European trading, changes byline/dateline)

By Gus Trompiz and Colin Packham

PARIS/SYDNEY, July 6 (Reuters) - U.S. grain and soybean futures fell sharply on Monday as lighter rainfall than expected eased fears about Midwest crops while worries over Greece and China led investors to shun many commodity markets.

A stronger dollar also coolled Chicago markets that were resuming trade after a three-day closure for the U.S. Independence Day holiday.

Wheat, which had already retreated last week after bearish U.S. government supply estimates, led losses as reports that less rain than anticipated fell over the weekend eased concerns about damage to the soft red winter wheat harvest.

Corn prices pulled back from 2015 highs notched up last week after heavy Midwest rain raised crop concerns and following a tighter-than-expected official supply outlook for corn and soybeans.

Chicago Board of Trade September wheat futures fell as much as 3.1 percent to a one-week low of $5.72-1/4. By the trading break before the start of the U.S. daytime session, it was down 2.7 percent at $5.74-1/2.

CBOT September corn was down 2.2 percent to $4.19-1/4. In the previous session, the contract had hit its highest since late December, while the soon-to-expire July contract set a one-year high for spot prices.

“After the heavy rainfall and lower-than-expected stocks in the U.S. had catapulted the corn price to a one-year high last week, it has now fallen slightly following a drier weekend and in the face of a stronger US dollar,” Commerzbank analysts said in a note.

Uncertainty created by Greece’s rejection in a referendum of bailout terms from its creditors weighed on equity and commodity markets, while pushing down the euro and helping to strengthen the dollar.

Commodity markets were also unnerved by emergency measures in China to support its tumbling stock markets, which added to worries about the world’s second-largest economy and biggest consumer of a clutch of raw materials including soybeans.

August soybeans slipped 2.0 percent to $10.17-3/4 to pull away from a six-month high touched last week.

However, analysts said weather risks could continue to support crop markets, particularly given parched conditions in Canada and western Europe, two major exporting zones. (Editing by William Hardy)

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