GRAINS-U.S. corn, soy firm ahead of USDA data this week; weather eyed

(Recasts with U.S. markets; updates prices, adds quotes, changes dateline; previous LONDON) CHICAGO, Aug 7 (Reuters) - U.S. corn and soybean futures rose more than 1 percent on Monday on position-squaring ahead of U.S. government crop reports due later this week, along with worries about dry conditions in parts of the Midwest, traders said. Wheat followed the firm trend. As of 12:45 p.m. CDT (1745 GMT), Chicago Board of Trade December corn futures were up 6 cents at $3.87 per bushel. November soybeans were up 14 cents at $9.70-3/4 a bushel. CBOT September wheat was up 6 cents at $4.60-3/4 a bushel. Traders are starting to adjust their holdings ahead of the U.S. Department of Agriculture's monthly supply/demand reports for August, which are due on Thursday. "The biggest thing is short-covering ... It's more in advance of the crop report, than anything particular in the weather, although weather forecasts are a little bit dry," said Terry Linn of Linn & Associates, a Chicago brokerage. The USDA's report on Thursday will include its first yield estimates incorporating field data for the 2017 U.S. corn and soybean crops. Analysts surveyed by Reuters on average expect the USDA to project the U.S. 2017 corn yield at 166.2 bushels per acre (bpa), below the government's current trend-based forecast of 170.7 bpa. For soybeans, the average of analysts' yield estimates was 47.5 bpa, below the USDA's current trend-based figure of 48.0 bpa. Weather remains a key topic as the U.S. corn and soy crops continue to develop. Temperatures have turned cooler in the Midwest crop belt this month but some areas need moisture. "Rains should improve moisture a bit in Minnesota, northern Iowa, Mississippi and central Tennessee this week, but limited rains in western and southern Iowa, northern and eastern Missouri, southwestern Illinois, western Kentucky, and northern Arkansas will maintain dryness and stress on corn and soybeans," MDA Weather Services said in a note to clients. Analysts expected the USDA in a weekly report later on Monday to leave crop condition ratings unchanged for corn, soybeans and spring wheat. Wheat futures rose, with the CBOT September contract rebounding after setting a seven-week low on Friday at $4.53-1/2. "Grain and oilseed markets are taking a big breather after big action last week and probably there is some bargain buying at these levels," said Phin Ziebell, agribusiness economist at National Australia Bank.

CBOT prices as of 12:47 p.m. CDT (1747 GMT):

Net Pct Volume Last change change CBOT wheat WU7 461.25 6.50 1.4 46283 CBOT corn CZ7 386.75 5.75 1.5 103538 CBOT soybeans SX7 970.50 13.75 1.4 85334 CBOT soymeal SMZ7 314.60 5.20 1.7 27853 CBOT soyoil BOZ7 33.91 -0.12 -0.4 32433

NOTE: CBOT September wheat, December corn and November soybeans shown in cents per bushel, December soymeal in dollars per short ton and December soyoil in cents per lb.

(Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by David Evans and Dan Grebler)