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GRAINS-Corn, soybeans set 1-week highs on U.S. weather concerns

Tom Polansek

* Corn rises to highest price since Aug. 20

* Soybeans reached highest since Aug. 22

* Ample world supplies weigh on wheat (Adds start of U.S. trading, comments from analysts, latest prices; previous dateline SINGAPORE)

CHICAGO, Aug 29 (Reuters) - U.S. corn and soybean futures touched one-week highs on Thursday as traders worried about the risk of frost damage to this year's late planted U.S. crops, analysts said.

Traders were also covering short positions after recent declines and ahead of the upcoming three-day Labor Day weekend.

They remain nervous about the potential for unfavorable weather to hurt developing corn and soybeans, after historic rains and flooding stalled planting in the spring. The delays made the crops more vulnerable to damage from frost.

"With the late maturity that's out there on soybeans, that's going to be a concern in the back of the trade's mind for awhile," said Matt Wiegand, commodity broker for FuturesOne.

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.1% at $3.71-1/4 a bushel by 12 p.m. CDT (1700 GMT). Soybeans were up 0.4% at $8.69 a bushel.

The corn market dropped to its lowest in more than three months on Wednesday as the U.S. crop has been progressing well after the spring floods caused unprecedented planting delays.

Mild, mostly dry weather is favoring the development of late-planted corn and soybeans, agricultural meteorologists said.

"While conditions are mostly benign across the Corn Belt, the crops need an extended period of favorable weather to finish this year," said Karl Setzer, commodity market risk analyst for AgriVisor.

"This includes a frost date well into late October, which not all forecasters believe is possible."

Grain traders are also eyeing the U.S.-China trade war. China, the world's biggest importer of soybeans, slashed purchases from the United States after imposing retaliatory tariffs on imports of American soy last year, in response to U.S. duties on Chinese goods.

The countries are discussing the next round of face-to-face trade talks scheduled in September, but hopes for progress hinge on whether Washington can create favourable conditions, China's commerce ministry said on Thursday.

The U.S. Department of Agriculture said U.S. soybean export sales in the week to Aug. 22 totaled 448,300 tonnes and corn sales were 856,300 tonnes, both in line with analysts' expectations.

U.S. wheat sales were 661,700 tonnes, near the high end of trade expectations.

But U.S. wheat exporters still face stiff competition for business on the global market, where supplies are abundant, traders said.

Most-active CBOT wheat slipped 0.2% to $4.74-1/4 a bushel. (Reporting by Tom Polansek in Chicago. Additional reporting by Naveen Thukral in Singapore Editing by Jonathan Oatis and Richard Chang)