GRAINS-Wheat drops for 3rd session on US rain outlook; soybeans, corn down

By Naveen Thukral

SINGAPORE, May 7 (Reuters) - Chicago wheat slid for a third consecutive session on Thursday, as forecasts for rains in parched U.S. winter crop areas eased some supply concerns, although losses were limited because some crops may have already suffered irreversible damage.

Soybeans and corn dropped to the lowest in more than a week.

"Some of the strength we saw in agricultural markets was related to crude oil and the Iran war," said one trader in Singapore. "U.S. drought has also been supporting wheat prices, and now there is some improvement in weather; rains are expected for winter crop areas."

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 lost 0.9% to $6.11-3/4 a bushel, as of 0355 GMT, soybeans Sv1 gave up 0.5% to $ 11.89 a bushel and corn Cv1 fell 0.6% to $4.65-1/2 a bushel.

Soybeans slid to their lowest since April 28 while corn hit its weakest since April 27.

Rain is forecast to hit some dry U.S. wheat zones this week, although traders said precipitation may come too late to save the crop in some areas.

The U.S. Department of Agriculture's weekly report said 31% of the nation's winter wheat crop was in good to excellent condition, up from 30% last week but still the lowest for this time of the year since 2023.

Optimism over a possible end to the war in the Middle East is adding pressure on soybeans, corn and wheat futures.

However, oil prices rose about $1 on Thursday, as investors weighed the prospects of a Middle East peace deal succeeding.O/R

Iran said it was reviewing a U.S. peace proposal that sources said would formally end the war while leaving unresolved the key U.S. demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.

The war has driven fluctuations in oil prices, strongly influencing agricultural markets, as corn and soybean oils are widely used as inputs for production of alternative fuels.