(Recasts, updates prices, market activity; new byline, changes
dateline, previously PARIS/SINGAPORE)

By Mark Weinraub

CHICAGO (Reuters) - U.S. wheat futures fell to a
2-1/2 week low Tuesday, despite rising export demand for
U.S. supplies, as investors took more profits from the market's
recent surge to two-year highs on crop worries in the
drought-stricken Black Sea region, traders said.

"We have a market that just is exhausting the buying
interest right now," said Shawn McCambridge, grains analyst
with Prudential Bache Commodities in Chicago. "Things that took
us to our recent high have been pretty well digested and
traded. Now the market is left trying to find something else."

Egypt, the world's largest wheat buyer, said Tuesday it
bought 55,000 tonnes of U.S. hard red winter wheat for shipment
in September, its first purchase of U.S. supplies since
September 2009.

"Business is picking up and most of it is hard red winter
(wheat) because it's the best quality available and they (U.S.
farmers) had a big crop," said Paul Haugens, vice-president for
Newedge USA.

Overseas buyers have viewed U.S. wheat as too expensive for
much of the past year and most looked to countries such as
Russia for cheaper supplies. But Russia banned exports due to
the drought, forcing countries to seek wheat elsewhere.

At 11:19 a.m. CDT, Chicago Board of Trade soft
red winter wheat futures for September delivery were down
4-1/4 cents at $6.59-1/2 bushel. The nearby wheat contract was
trading at its lowest level since July 30.

Wheat markets were awaiting firmer indications about the
impact of the drought on the upcoming sowing season, and about
how much Black Sea grain will be available for export, with
Ukraine confirming plans to limit grain imports to 2.5 million
tonnes until the year-end.

Corn and soybean futures bucked the downward trend in wheat
amid growing concerns about hot weather causing some damage to
the developing U.S. crops.

CBOT corn for September delivery was up 4-1/2 cents
at $4.11-3/4 a bushel while front-month September soybeans
rose 6 cents to $10.40 a bushel.

The U.S. Department of Agriculture lowered its condition
ratings for the corn crop Monday. Hot weather in key growing
areas of the United States and severe flooding in parts of Iowa
sparked the downgrade.

USDA's weekly ratings report pegged the corn crop as 69
percent good to excellent, down from 71 percent last week and
below analysts' expectations of 70 percent.

Heavy rains in South Dakota appeared to limit the potential
of the corn crop, scouts on an annual tour found.
Scouts on another leg of the tour through Ohio
found signs of heat stress that could hamper corn yields.

Prospects for rising demand for feed corn due to tightening
wheat supplies also have boosted corn. Strong export demand
from top importer China added support to soybean prices.
(Additional reporting by Sam Nelson in Chicago, Gus Trompiz in
Paris and Naveen Thukral in Singapore; Editing by David
Gregorio)