GRAINS-Wheat futures fall more than 2 pct on light demand

* Abundant supplies push wheat futures down 2 percent

* Tight supplies support nearby soybean market (Updates with CBOT trade, adds new quotes, dateline, byline)

CHICAGO, Aug 27 - Wheat futures fell more than 2 percent at the Chicago Board of Trade on Thursday amid fears of plentiful global supplies outstripping demand, traders said.

"I still think it is ... concerns about the pace of demand," said Shawn McCambridge, analyst for Prudential Bache Commodities. "We still have plenty of wheat in the United States, and also world markets, and that continues to weigh on our prices here today."

Sliding corn prices also weighed on the wheat market as some buyers in the livestock industry were looking at corn-based feed as an alternative to wheat for animals' rations.

Large stocks of wheat around the world were providing stiff competition for U.S. supplies on the export market.

The U.S. Agriculture Department said export sales of U.S. wheat last week totaled 652,700 tonnes (old crop), above estimates for 350,000 to 450,000 tonnes. But wheat exports were running well below levels reached in 2008.

At 11:26 a.m. CDT (1626 GMT) on the Chicago Board of Trade, September soft red winter wheat futures were down 10-1/4 cents at $4.68-1/2 a bushel. Hard red winter wheat futures at the Kansas City Board of Trade and spring wheat futures at the Minneapolis Grain Exchange also were trading lower.

CBOT September corn futures were 2 cents lower at $3.18-1/2 a bushel.

Soybean futures were mixed, with prices for nearby contracts rising due to tight supplies in the country and good demand on the export market, but deferred months were easing amid prospects for a large harvest this fall.

Traders also were monitoring the call for a seven-day farmer strike in Argentina, though it was unlikely to have any immediate impact on global soybean trade as the bulk of the recently harvested crop had been shipped.

USDA said export sales of U.S. soybeans last week totaled 2,054,200 tonnes (old and new crop), above estimates for 800,000 to 1,250,000 tonnes.

CBOT September soybean futures were up 5-1/4 cents at $10.95-3/4 a bushel. The new-crop November contract was down 2-1/2 cents at $9.94 a bushel.

The front-month gains in soybean futures came as the physical market strengthened, with grain dealers boosting spot soybean basis bids around the U.S. Midwest on Thursday.

"Cash bids firmed quite a lot. There is not much of the old crop left and people who are buying soy are paying a premium," said Ben Barber, commodities broker at Bell Commodities in Melbourne.

In Argentina, farm leaders have called for a week-long commercial strike that would halt grain and beef sales in protest at government farm policy.

The country is the world's third largest exporter of soybeans and the biggest supplier of soyoil and soymeal, as well as the second-largest exporter of corn, after the United States.

"Last time they had a strike, it was very bullish for the prices," said Barber. "At the moment they are just talking about one week, which is not going to have a huge impact, but, if it escalates, yes, definitely." ---------------------------------------------------------------- Prices at 11:32 a.m. CDT (1632 GMT)

Pct 2008 YTD

Last Change Chg Close Pct Chg --------------------------------------------------------------- CBOT corn 3.1875 -0.0175 -0.6 4.07 -21.7 CBOT soy 10.9900 0.0850 0.8 9.7225 13.0 CBOT meal 375.00 12.00 3.3 300.5 24.8 CBOT soyoil 0.3615 -0.0031 -0.9 0.3329 8.6 CBOT wheat 4.6900 -0.0975 -2.0 6.1075 -23.2 CBOT rice 13.0950 -0.0550 -0.4 15.34 -14.6 EU wheat 129.50 0.5 0.4 137 -5.5 US crude 70.87 -0.56 -0.8 44.60 58.9 Dow Jones 9549 6 0.1 8776 8.8 Gold 946.50 2.40 0.3 878.20 7.8 Euro/dollar 1.4276 0.0033 0.2 1.3978 2.1 Dollar Index 78.4670 -0.1940 -0.3 81.1510 -3.3 Baltic Freight 2425 -2 -0.1 774 213

In U.S. dollars, front-month contracts, except EU wheat, which is in euros. CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb.