GRAINS-Soy climbs as hot, dry outlook threatens U.S. yields
* Forecasts predict hot, dry weather in Midwest
* USDA weekly update expected to show lower soy ratings
* Potential for further decline in U.S. soy crop outlook
(Adds quotes, updates prices, previous Sydney)
LONDON, Sept 3 (Reuters) - U.S. soybeans rose more than 3 percent on Tuesday as weather models forecast hot, dry conditions across the Midwest, raising fears of potential yield loss.
Corn and wheat prices also rose.
"The market is looking at the forecast, which is expected to see a return to the hot, dry weather after some limited relief from light showers over the weekend," said Luke Mathews, agricultural commodities strategist at the Commonwealth Bank of Australia.
November soybeans on the Chicago Board of Trade rose 3.4 percent to $14.04 per bushel by 1042 GMT, climbing back up towards last week's 11-month high of $14.09-1/2 a bushel.
Dealers expected a further decline in crop conditions when the U.S. Department of Agriculture issues a weekly update later on Tuesday.
"The U.S. Department of Agriculture had already reduced the proportion of soybean plants rated good or excellent by 4 percentage points to 58 percent last week, a trend which we could see continue in the latest report published today," Commerzbank said.
U.S. soybeans have suffered as a result of prolonged unfavorable weather, forcing some forecasters to lower production estimates.
The Commodity Weather Group, a U.S.-based weather forecasting firm, lowered its forecast of the average U.S. 2013 soybean yield to 41.7 bushels per acre, down 2.4 bushels from its previous forecast, trade sources said on August 30.
CBOT corn also drew support from the forecast for hot, dry weather in the Midwest with December up 1.7 percent at $4.90 a bushel. CBOT September wheat climbed by a more modest 0.8 percent to $6.48-1/4 a bushel.
"Corn crops are more impacted (than wheat) given the fact that the yield potential can still be lowered," analysts Agritel said in a market note.
November milling wheat in Paris stood 0.7 percent higher at 191.25 euros a tonne. 3/8
(Additional reporting by Colin Packham in Sydney, editing by William Hardy)