Corn futures slide by daily limit as U.S. crop weather improves

* CBOT corn falls by 40-cent limit

* Market retreats from rallies last week

* Cooler, wetter weather fuels hopes for big crop yields

CHICAGO, July 6 (Reuters) - Chicago Board of Trade corn futures sank by the daily, exchange-imposed limit on Tuesday as forecasts for cool, wet weather in U.S. growing areas eased concerns about unfavorable crop conditions.

The market pulled back after climbing 12% last week on lower-than-anticipated U.S. plantings estimates from the Department of Agriculture. The estimates, issued on Wednesday, made futures more sensitive to dryness in northern and western portions of the U.S. crop belt.

It is difficult for agricultural markets to rally with largely favorable Midwest weather seen into mid-July, said Rich Feltes, head of market insights for broker RJ O'Brien. Farmers' lower-than-expected plantings are being overshadowed by the potential for above-average yields across 75% of the U.S. growing area, he said.

The favorable weather outlook, if realized, will ease stress on corn crop just as it passes through its key yield-determining stage of pollination.

"There is little question over the wetter outlook for this week that is expected to provide beneficial rains to some of the driest areas of Iowa, Minnesota, and the Dakotas, while also reducing heat risks for the region," said Arlan Suderman, chief commodities economist for broker StoneX.

CBOT corn futures were down by the daily 40-cent limit in every contract month through July 2022 by 10:24 a.m. CDT (1524 GMT). Other markets were also sharply lower.

Soybeans were down 78 cents at $13.21. Wheat was 30-3/4 cents lower at $6.22.

Traders are waiting for the USDA to issue a weekly update on U.S. crop conditions on Tuesday afternoon, one day later than normal because markets were closed on Monday for the U.S. Independence Day holiday.

"In the Corn Belt, showers and thunderstorms crossing Minnesota and the Dakotas are providing beneficial moisture for drought-affected corn and soybeans," the USDA said in a daily weather report.

(Reporting by Tom Polansek in Chicago; Editing by Richard Chang)