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GRAINS-Soy dives on China's economic uncertainty

* Soybean prices fall after People's Bank of China cuts interest rates

* Forecasts of improved crop weather this week add pressure

* Grains weighed by improved outlook for Ukraine exports (New throughout; updates byline, dateline previously LONDON)

By Christopher Walljasper

CHICAGO, Aug 15 (Reuters) - Chicago soybeans dropped more than 3.5% on Monday, their first decline in three sessions following unexpected data from China that suggested declining demand for U.S. agricultural commodities from the country.

The People's Bank of China cut key interest rates on weaker-than-expected economic data from the world's second-largest economy, raising concerns of a global recession.

U.S. weather forecasts for rain in the coming weeks could aid parched soybean crops, adding pressure to markets.

Corn and wheat prices followed lower.

The most-active soybean contract on the Chicago Board of Trade lost 46-1/4 cents to $14.08 a bushel by 10:48 a.m. (1548 GMT), after falling to $13.86 earlier in the session, its lowest since Aug. 4.

The most active CBOT corn contract fell 18-1/4 cents to $6.24 a bushel, while CBOT wheat lost 10 cents to $8.12 a bushel.

A contraction of China's economy, the largest buyer of U.S. soybeans, could curb demand for U.S. commodities, said Arlan Suderman, chief commodities economist at StoneX.

"China’s been talking down their demand, but meanwhile, they’ve been supplementing their demand with soybeans coming out of their reserve," he said. "Is demand robust? No. But I don’t think it’s as poor as what they indicate."

Meanwhile, U.S. soybean production is expected to be bigger than previously forecast as better-than-expected yields will more than make up for a cut to acreage, the U.S. government said on Friday.

Corn and wheat futures were also pressured by fears of cutbacks in China, though recent heat across the U.S. Midwest may have reduced yield for developing corn crops.

"There is some rain around in the drier areas of the cornbelt. On the corn, it’s probably too late to do any good, but certainly some rain would be helpful to the bean yield," said Chuck Shelby, president of Risk Management Commodities.

Wheat felt pressure as two more ships carrying grain left Ukraine's Black Sea ports on Saturday, bringing the total number of vessels to depart the country under a U.N.-brokered deal to 16.

Ukraine's grain exports are down 46% year on year at 2.65 million tonnes so far in the 2022/23 season, the agriculture ministry said on Monday. (Reporting by Christopher Walljasper Additional reporting by Nigel Hunt Editing by Mark Potter)

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