COMMODITIES-Oil, metals crumple on US jobs data; grain rally stalls

* U.S. jobs report fuels worries about global economy

* CRB index drops 2.2 pct, biggest daily decline since Dec

* Oil lead sell-off as Norway expected to end strike

* Grains end three-week drought-induced rally

* Copper falls 2 pct, gold off more than 1 pct

(Updates throughout)

NEW YORK, July 6 (Reuters) - Commodities tumbled on Friday
by their most this year, eroding their second successive weekly
gain after dismal U.S. jobs data fueled worries about the global
economy and raw materials demand.

Profit-taking in grain markets halted a three-week,
drought-fueled rally that had driven corn prices up more than a
third, while oil erased the week's gains, partly on hope that
weekend talks between Norway's oil industry and striking oil and
gas workers might avert a complete halt in production.

U.S. data showed non-farm payrolls expanded by only 80,000
jobs in June, weaker than forecast and the third straight month
that fewer than 100,000 jobs were created. The unemployment rate
remained at 8.2 percent. The dollar rallied and U.S. stocks
fell, a recipe for selling raw materials.

The Thomson Reuters-Jefferies CRB index fell 2.2
percent to 286.92, the biggest one-day decline since December,
knocking down the weekly gain to just under 1 percent. The loss
curbed one of the biggest, broad-based commodities rallies on
record; from June 29 until Thursday, the CRB was up nearly 8
percent.

Most commodities began to fall early, a day after the
European and Chinese central banks trimmed rates and Britain's
bank extended a bond-buying scheme. Those measures sparked worry
among many investors that the global economy was deteriorating
rather than hope for quicker economic growth.

Analysts called the U.S. jobs report a worst-case scenario
for commodity bulls, showing the economy is weak but not yet
weak enough to prompt the Federal Reserve to unleash a third
round of quantitative easing, or QE3.

"Overall, it was another lackluster report but should not
change forecasts for Fed action in any meaningful way," said
Omer Esiner, chief market analyst at Commonwealth Foreign
Exchange in Washington D.C.

"While it is not enough to increase calls for QE3, it was
also not enough to take QE3 off the table. We are still in
data-watching mode in the U.S. in terms of Fed policy."

Markets are likely to look inward for direction next week,
with a host of fundamental figures from trade data in China to a
monthly U.S. crop report likely driving sentiment.

Oil fell sharply as investors not only worried about the
U.S. economy but priced in higher supplies after Norway's
government asked oil companies and union representatives to
resume mediated talks on Saturday to avert a total shutdown of
oil and gas output by western Europe's biggest producer.

Brent crude tumbled after reaching a one-month peak above
$102 per barrel on Thursday. August Brent fell $2.51 or 2.5
percent, to close at $98.19 a barrel, cutting the week's gains
to 39 cents.

Benchmark copper on the London Metal Exchange was
last bid at $7,530 per tonne, down 2.2 percent from Thursday,
when a surprise rate cut in China sparked new fears about
fundamentals of the world's fastest-growing commodity consumer.

"The rate cut in China raised concerns that a string of
economic data that will be published next week might be
significantly weaker than previously expected," Daniel
Briesemann, an analyst at Commerzbank said.

Gold was also swept lower in the aftermath of the U.S. jobs
report as investors turned to the perceived safety of the
greenback. The dollar index rose 0.6 percent, taking this
week's gains to more than 2 percent, the most this year.

Spot gold initially rallied in response to the
report, touching a session high of $1,609.39 an ounce on the
view that the poor number would pile pressure on the Federal
Reserve to ease monetary policy further.

The metal then turned negative, falling 1.3 percent to
$1,583 an ounce as the dollar's rally a five-week high against
the euro reduced gold's appeal as an alternative asset.

GRAINS RALLY PAUSES

Grains, which had bucked a weaker trend on Thursday, took a
pause from a sizzling rally over the past three weeks fueled by
a severe drought in the U.S. Midwest. Weather forecasts offered
scant relief from the heat and only marginal rains.

New crop December corn slid 2.3 percent to $6.92 a
bushel, while September wheat dropped 3.8 percent to $8.06
a bushel. Despite the losses, corn was still up more than a
third over the past three weeks.

With the crop now entering the peak period of pollination,
when heat can severely diminish its ability to put kernels on
each ear, few analysts expected the price relief to last.

"It's a temporary setback as we wait for weather, for
moisture," said Rich Nelson, analyst at Allendale Inc.

Prices at 3:44 p.m. EST (1944 GMT)

LAST/ NET PCT YTD

CLOSE CHG CHG CHG
US crude 84.16 -3.06 -3.5% -14.8%
Brent crude 97.86 -2.84 -2.8% -8.9%
Natural gas 2.776 -0.169 -5.7% -7.1%

US gold 1580.00 -30.50 -1.9% 0.8%
Gold 1582.66 -21.67 -1.4% 1.2%
US Copper 340.95 -8.35 -2.4% -0.8%

Dollar 83.334 0.520 0.6% 3.9%
CRB 286.920 -6.340 -2.2% -6.0%

US corn 693.00 -15.50 -2.2% 7.2%
US soybeans 1532.00 -19.50 -1.3% 27.8%
US wheat 821.75 -25.25 -3.0% 25.9%

US Coffee 176.45 -3.90 -2.2% -22.7%
US Cocoa 2252.00 -76.00 -3.3% 6.8%
US Sugar 22.46 0.29 1.3% -3.3%

US silver 26.920 -0.752 -2.7% -3.6%
US platinum 1448.50 -28.20 -1.9% 3.1%
US palladium 580.35 -5.40 -0.9% -11.6%

(Reporting by Eric Onstad in London and Jonathan Leff in New
York; Editing by David Gregorio)