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GRAINS-Cooler, wetter U.S. weather outlook drags down corn, soy

* Markets retreat after gains earlier this week on US heat
    * Half of US crop belt seen getting rain this weekend
    * Coming up: U.S. grain markets close Monday for US holiday

 (Updates with U.S. trading, pvs dateline HAMBURG/SINGAPORE)
    By Tom Polansek
    CHICAGO, Aug 30 (Reuters) - U.S. corn and soybean futures
eased for a second day on Friday on forecasts for rain and
cooler temperatures to relieve stressful crop conditions across
the U.S. Midwest grain belt.
    Wheat futures edged up as the market recovered from three
straight sessions of declines.
	
Worries about hot and dry weather in the Midwest have supported soybean and corn prices recently, with new-crop November soybeans rising to an 11-month high earlier this week, and corn futures climbing to a five-week peak. But prices began to pull back on Thursday as meteorologists called for more rain over the coming weekend. "Weather forecasts are showing some degree of improvement and this is easing the market's fears," said Sterling Smith, futures specialist for Citi. Chicago Board of Trade November soybeans were down 11 cents at $13.57-1/2 a bushel by 9:50 CDT (1450 GMT), and December corn slipped 1/2-cent to $4.81 a bushel. Traders are closely following weather forecasts because soybeans are in a critical stage of development. Showers should bring rain to nearly half of the U.S. Midwest crop belt during the weekend, but most of next week will be dry, said Joel Widenor of the Commodity Weather Group. Grain buyers are hoping large harvests will replenish corn and soybean supplies that are historically tight after a severe U.S. drought last year. The "worst of 2013 U.S. summer heat will be over in two days," said Rich Feltes, vice president of research for brokerage R.J. O'Brien.
Still, the U.S. Department of Agriculture will likely cut its crop condition ratings for corn and soybeans in a weekly report on Tuesday due to hot, dry weather this week, Feltes said. He predicted a drop of 2 to 4 percentage points in the good-to-excellent rating for corn and a drop of 3 to 5 percentage points for soybeans. LONG WEEKEND LOOMS The outlook for beneficial crop weather next week overshadowed a sale of 110,000 tonnes of U.S. soybeans to China, which was announced on Friday. After Friday's trading session, the U.S. grain markets will stay closed until 7 p.m. CDT (2300 GMT) Monday because of the U.S. Labor Day holiday on Monday. "A shift in weather forecasts over the weekend could have massive price implications on Monday night," said Joe Vaclavik, president of brokerage Standard Grain. "This weekend and its accompanying weather forecasts could be a make-or-break situation for the bean market." The wheat market was underpinned by demand and concerns about crop conditions in Argentina and Australia, according to traders. Dry weather followed by frost damage in Australia's eastern grain belt is likely to prompt lower production of high-protein prime hard wheat this year, bolstering prices.
Argentina's recently planted 2013/14 wheat crop has seen uneven rains, with healthy rainfall in southern parts of the wheat belt but dry conditions are beginning to hurt more farms further north, the Buenos Aires Grains Exchange said. September wheat rose 6-1/4 cents to $6.47-1/2 a bushel. Prices at 9:47 a.m. CDT (1447 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 497.25 0.00 0.0% -28.8% CBOT soy 1422.75 -7.25 -0.5% 0.3% CBOT meal 465.90 -1.50 -0.3% 10.8% CBOT soyoil 43.63 -0.15 -0.3% -11.2% CBOT wheat 647.50 6.25 1.0% -16.8% CBOT rice 1586.50 21.50 1.4% 6.8% EU wheat 188.00 -0.25 -0.1% -24.9% US crude 108.01 -0.78 -0.7% 17.6% Dow Jones 14,794 -47 -0.3% 12.9% Gold 1395.70 -11.94 -0.8% -16.6% Euro/dollar 1.3192 -0.0048 -0.4% 0.0% Dollar Index 82.1940 0.2460 0.3% 3.0% Baltic Freight 1132 -4 -0.4% 61.9% (Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by William Hardy and Jeffrey Benkoe)

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