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GRAINS-Corn prices edge up, focus remains on U.S. yield outlook

Nigel Hunt

* Corn edges up as crop tour points to lower Illinois yields

* Tunisia buys 92,000 tonnes of soft milling wheat at tender (Adds quote, updates prices)

LONDON, Aug 22 (Reuters) - Chicago corn futures edged up on Thursday as a widely watched crop tour indicated there could be a drop in yields in Illinois, the second largest corn-growing state.

Soybean and wheat prices were also higher.

The most-active corn contract on the Chicago Board Of Trade had risen 0.1% to $3.70-3/4 a bushel by 1125 GMT, edging further away from a three-month low of $3.66-1/4 a bushel set on Wednesday.

The Pro Farmer Midwest Crop tour found Illinois corn and soybean yield prospects were down from last year and the three-year average.

"The true extent of the damage will not be known for several weeks until the crop goes through its finish stage. With many areas behind in maturity, an early cold snap could be devastating," brokerage Allendale said in a market note.

The crop tour wraps up in Minnesota on Thursday and editors of the Pro Farmer newsletter are expected to release U.S. soybean and corn production estimates the following day.

Corn prices have also been supported by demand from Mexico.

The U.S. Department of Agriculture said on Wednesday that private exporters sold 328,000 tonnes of U.S. corn to Mexico for delivery in the 2019/20 marketing year that begins on Sept. 1.

Corn prices are likely to be influenced by the U.S. Midwest weather as this year's plantings were delayed.

"The market still looks shaky in our view," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"Weather forecasters continue to expect much of the U.S. Midwest to experience crop-friendly weather. That outlook is more likely than not to pressure prices beyond those lows set last May."

Some outlooks, however, saw cooler-than-normal temperatures in the U.S. Midwest that could slow the development of corn and soybean crops.

The most active CBOT soybean futures contract rose 0.1 percent to $8.74-1/4 a bushel.

Wheat prices were also higher with the most active CBOT contract up 0.1 percent at $4.68-1/2 a bushel while December wheat on Paris-based Euronext rose 0.15 percent to 170 euros a tonne.

Dealers said the recent drop in wheat prices may have sparked increased buying interest from importers, noting a purchase by Tunisia.

Tunisia's state grains agency purchased 92,000 tonnes of soft milling wheat on Wednesday, matching the amount it had been seeking in the tender, European traders said on Thursday.

(Additional reporting by Naveen Thukral in Singapore; editing by Richard Pullin, Kirsten Donovan)