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

(Updates with closing prices, USDA crop progress figures) 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. Chicago Board of Trade December corn futures settled up 5-3/4 cents at $3.86-3/4 per bushel. November soybeans ended up 13 cents at $9.69-3/4 a bushel, and CBOT September wheat rose 8-3/4 cents at $4.63-1/2 a bushel. Traders have started adjusting their holdings ahead of the U.S. Department of Agriculture's hotly anticipated 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 will include the department's 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. After the CBOT close, the USDA in its weekly crop progress report rated 60 percent of the U.S. crop in good to excellent condition, down from 61 percent a week earlier. The government also rated 60 percent of the soybean crop as good to excellent, up from 59 percent the previous week. Analysts surveyed by Reuters on average had expected no change in ratings for either crop. CBOT wheat futures rose, with the 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 settlement prices:

Last Net Pct Volume

change change

CBOT wheat WU7 463.50 8.75 1.9 64834 CBOT corn CZ7 386.75 5.75 1.5 163774 CBOT soybeans SX7 969.75 13.00 1.4 100578 CBOT soymeal SMZ7 314.20 4.80 1.6 34764 CBOT soyoil BOZ7 33.93 -0.10 -0.3 42940

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 Dan Grebler and Leslie Adler)