GRAINS-Corn surges 3 pct as dry weather fuels short-covering
* Corn, soybeans rally as August seen mostly hot and dry
* Big export sales, USDA unplanted acres data add support
* Wheat follows corn and soybeans higher
(Rewrites throughout, adds quotes, updates prices, changes dateline from SINGAPORE/LONDON, changes byline) CHICAGO, Aug 15 (Reuters) - U.S. corn futures rallied nearly 3 percent on Wednesday and soybeans rose almost 2 percent to a three-week high as forecasts of hot and dry weather in parts of the Midwest fuelled concerns about lower crop yields. Short-covering by commodity funds added support, particularly in corn, which hit a near-three-year low earlier in the week. "Weather is the big issue. The market is a little nervous about just what we're going to see over the next couple of weeks, particularly in Iowa," said Sterling Smith, futures specialist with Citigroup. "We had pretty aggressively sold the corn down and built up a pretty good fund short position, and some of that is coming off now." Warmer and drier weather in the U.S. Midwest through the end of August will draw down soil moisture levels, posing a threat to reduce crop yields, said Andy Karst, meteorologist for World Weather Inc. "There will be some stress on crops in western and southern Iowa, northeast Missouri and west-central Illinois," he said. However, the warmer temperatures will also boost corn and soybean growth and reduce the threat of harm from an early frost, he said. Chicago Board of Trade December corn added 13-3/4 cents, or 3 percent, to $4.69 a bushel by 10:35 a.m. CDT (1535 GMT). CBOT November soybeans gained 20-3/4 cents, or 1.7 percent, to $12.59-3/4 a bushel, the highest level for the contract since July 25. Both commodities drew support from a U.S. Department of Agriculture report on Thursday that showed a larger-than-expected number of acres went unplanted this spring due to wet weather. The data suggested acreage figures in USDA's latest crop production report may be overstated, trade sources said. Robust export sales further supported the market. USDA pegged net U.S. soybean export sales last week at nearly 1.9 million tonnes, the highest weekly tally in 18 months. Corn export sales were well above expectations. Wheat futures advanced on spillover strength from higher corn and soybeans, with the CBOT September wheat contract up 6-1/2 cents, or 1 percent, at $6.37 a bushel.
Prices at 10:45 a.m. CDT (1545 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 476.25 11.50 2.5% -31.8% CBOT soy 1284.75 15.50 1.2% -9.4% CBOT meal 413.60 5.70 1.4% -1.7% CBOT soyoil 42.88 0.54 1.3% -12.8% CBOT wheat 636.75 6.25 1.0% -18.2% CBOT rice 1534.00 8.00 0.5% 3.2% EU wheat 184.50 2.50 1.4% -26.3% US crude 107.63 0.78 0.7% 17.2% Dow Jones 15,163 -175 -1.1% 15.7% Gold 1332.86 -1.73 -0.1% -20.4% Euro/dollar 1.3269 0.0014 0.1% 0.6% Dollar Index 81.6070 -0.1040 -0.1% 2.3% Baltic Freight 1091 31 2.9% 56.1%
(Additional reporting by Sam Nelson; editing by Jim Marshall)