GRAINS-U.S. grains down on strong dollar, crop weather

* Grains hurt by dollar rise, weak oil/equities

* Corn near 4-month lows, favourable U.S. weather weighs

* Harvests weigh on wheat; Euronext seen retesting floor

PARIS/SINGAPORE, July 6 - Chicago grain and soybean futures fell on Monday as a strengthening dollar and weaker crude oil combined with favourable crop weather to dent grain markets.

Corn, which lost more than 10 percent last week on benign crop conditions and a bigger than expected U.S. area estimate, drew close to four-month lows.

Wheat was lower in both Chicago and Europe as the grain remained under pressure from advancing northern hemsiphere harvests, expected to yield sizeable crops that would add to already ample global supplies.

Doubts about an early economic recovery, fed by poor U.S. job figures on Thursday, sapped investor confidence, pushing crude oil down to a five-week low near $64 a barrel and lifting the dollar.

A stronger dollar tends to weigh on U.S. commodities by making them more expensive for holders of other currencies, while the price of oil influences grains because of their use in alternative fuels.

Share prices also lost ground on the renewed investor caution as markets looked to this week's meeting of Group of Eight countries for further direction on the economy.

"The U.S. dollar will be receiving a lot support ahead of the G8 meeting which is keeping the commodity prices on the defensive," said Garry Booth, a trader with MF Global Australia.

"And there is favourable weather outlook in the U.S. and other countries."

WHEAT BEARISH

The Chicago Board of Trade July corn contract fell 1.74 percent to $3.39-3/4 a bushel, trading near the lowest level since March 2. July soybean futures fell 1.85 percent to $12.20 a bushel.

On wheat markets, Chicago July wheat was down 1.15 percent at $4.94-1/4 while on Euronext the benchmark November contract edged down 0.71 percent to 139.75 euros a tonne.

On Euronext, traders said a heavy fall in Chicago or more losses on financial markets could send the benchmark contract below the 138 euros floor that held last week.

With export demand subdued and the arrival of the new crop imminent, a negative surprise on harvest yields would be needed for European wheat to rally, they added.

"We'll have to see what comes out of the fields. Only disappointing results would allow a rebound," one trader said.

On the demand side, European Union wheat is facing a wave of Black Sea competition in southern EU countries as operators expect the bloc's latest import quotas, which open this week, to be filled immediately, traders said.

EU wheat did win some business in a purchase of 440,000 tonnes of hard wheat by Saudi Arabia at the weekend, although traders said the quality requirements suggested most of the volume would be supplies by the United States and Canada.

Analysts added grain markets were weighed down by news India had authorised the export of wheat and wheat products after monsoon rains revived, even if the absence of export subsidies is expected to limit these initial exports to neighbouring Bangladesh.

Grains prices as of 1104 GMT Product Last Change Percent Move End 2008 Ytd Percent

move CBOT corn 339.75 -6.00 -1.74 407.00 -16.52 CBOT soy 1220.00 -23.00 -1.85 972.25 -25.48 CBOT wheat 494.25 -5.75 -1.15 610.75 -19.07 CBOT rice 12.44 -0.34 -2.62 15.34 -18.90 European wheat 139.75 -1.00 -0.71 145.75 -4.12 US crude 63.86 Euro/dollar 1.3888 (Front-month contracts except for European wheat whose August contract is illiquid) (Corn, soybean, wheat U.S. cents per bushel) (Rice U.S. cents per hundredweight) (European wheat in euros per tonne) (Crude $ per barrel)