* Corn prices hit highest since July 28
* USDA cuts rating of U.S. crop condition
* Soybeans, wheat firm ahead of USDA world crop forecasts
(Recasts with European trade, adds new comment, changes dateline) HAMBURG, Aug 8 (Reuters) - Chicago corn rose on Tuesday to its highest in more than a week, supported by a U.S. Department of Agriculture (USDA) report showing a decline in the condition of the U.S. corn crop as dryness in U.S. farming regions continued. Wheat and soybeans gained on positioning ahead of the USDA's world grains and oilseeds supply and demand report on Thursday.
Chicago Board of Trade most-active December corn was up 0.3 percent at
$3.88-1/4 a bushel at 1010 GMT, after earlier on Tuesday hitting its highest since July 28 of $3.88-3/4 a bushel.
September wheat rose 0.8 percent to $4.67-1/4 a bushel and November soybeans rose 0.8 percent to $9.78 a bushel.
The USDA in its weekly crop progress report on Monday rated 60 percent of the U.S. corn crop in good-to-excellent condition, down from 61 percent a week
earlier. Analysts surveyed by Reuters on average had not expected
worsening conditions. "Corn is seeing support today from the reduction in U.S. crop condition ratings by the USDA on Monday and concern about generally dry weather in U.S. corn belts, Graydon Chong, senior commodity analyst with Rabobank, said. "Soybeans and wheat are being underpinned by position squaring ahead of the USDA report on Thursday, which will be the big focus of the week." "The USDA's cut in its assessment of U.S. corn condition was not much of a surprise given the general lack of rain in the somewhat dry U.S. corn regions in the last week. Not a lot of rain is forecast in the coming week so no substantial turnaround is currently on the radar, which remains supportive for corn prices." Corn and soybean markets are taking direction from generally dry weather in the U.S. Midwest as both crops mature. Investors have started adjusting their holdings ahead of the USDA's much anticipated world supply-demand reports for August, due on Thursday. This will include the department's first yield estimates incorporating field data for the 2017 U.S. corn and soybean crops. "The USDA is on Thursday expected to reduce its estimate of corn and soybean yields and positioning ahead of this is supportive," Rabobank's Chong said. "There is also some background concern about whether industrial disputes in Brazil could potentially delay corn and soybean export shipments, a factor the market continues to support." "Concern remains about the quality of the U.S. spring wheat after the unfavourable weather this year."
(Reporting by Michael Hogan, additional reporting by Naveen Thukral, editing by Jane Merriman)