GRAINS-Dryness in Argentina, U.S. Plains boosts prices

* Dry weather in Argentina underpins corn, soy

* Chinese demand in focus as soy supply tightens

* USDA reports further decline in U.S. wheat crop ratings

(Updates with U.S. trading, weather forecast, changes dateline from LONDON) CHICAGO, Jan 29 (Reuters) - U.S. corn and soybean futures rose on Tuesday as dry weather threatened to reduce production in major exporter Argentina, while wheat jumped on deteriorating crop conditions in the U.S. Plains. Traders are zeroing in on unfavourable weather conditions because large global harvests are needed to replenish tight supplies. "We're in a weather market right now, with reason," said Jack Scoville, vice president of Price Futures Group. "There are certainly plenty of issues going on in South America and the western Plains are still dry too." Light showers in Argentina, the world's top exporter of soy products and typically the second-largest corn supplier, will provide minimal relief from recent dryness, said Don Keeney, meteorologist for MDA EarthSat Weather. The combination of dry weather and temperatures above 100 degrees Fahrenheit in some areas will quickly draw down soil moisture reserves, he said. "Weather models keep trending drier and drier," Keeney said. Excessive rains in some parts of northern Brazil also area concern, according to Commonwealth Bank of Australia. At the Chicago Board of Trade, March soybeans rose 0.7 percent to $14.57-1/2 a bushel by 9:45 a.m. CST (1545 GMT), and March corn jumped 0.2 percent to $7.30-1/2 a bushel. March wheat gained 0.4 percent at $7.82 a bushel.

WHEAT WOES Wheat prices jumped as drought in the U.S. Plains led to a further deterioration in crop conditions. In Kansas, the top winter wheat-production state in the country, the crop was rated 20 percent good to excellent as of Jan. 27, down 4 percentage points from the end of December, according to the USDA's National Agricultural Statistics Service. Dealers also were watching conditions in the Black Sea region, a key source of wheat exports. Winter weather is favourable for Ukrainian grain crop, which could see its yield rise by 20 to 30 percent in 2013, a senior Ukrainian weather forecaster said. Autumn drought and severe frosts in almost all Ukrainian regions damaged about 2 million hectares of winter grains sown for last year's harvest, reducing the wheat crop to 15.76 million tonnes from 22.3 million tonnes in 2010.

SOY DEMAND Soybean prices posted the strongest gains amid expectations for strong demand from China, the world's biggest importer. China, the world's top soybean buyer, is expected to import more than 15 million tonnes of soybeans in the second quarter, up 36 percent from its estimated purchases in the January to March period, according to traders. Soybean harvest delays or transport problems in South America may shift business back to the United States in the next one to three months, pushing up U.S. soybean futures, Hamburg-based oilseeds analysts Oil World said. Brazil is forecast to overtake the United States as the number one exporter and producer of soybeans this season, with a 30 percent increase in its soybean crop, but the country has added no new capacity to its ports. Port congestion could delay shipments. Local crop analysts Celeres said Brazil had harvested 3 percent of the crop as of last week, with the bulk of the harvest coming from the top two producing states of Mato Grosso and Parana - at 6 percent and 5 percent respectively.

(Additional reporting by Sam Nelson in Chicago, Nigel Hunt in London and Naveen Thukral in Singapore; Editing by William Hardy and Sofina Mirza-Reid)