* New-crop corn, soybeans lead gains
    * Forecasts call for hot, dry weather in western Midwest
    * Short-covering noted in corn and wheat
    * Wheat buoyed by recent demand from China

 (Updates with closing prices)
    By Julie Ingwersen
    CHICAGO, July 9 (Reuters) - New-crop corn and soybean
futures on the Chicago Board of Trade rose on Tuesday for a
second straight session on fears that hot, dry weather in parts
of the U.S. Midwest later this month could stress crops, traders
said.
    Wheat rose 2 percent as recent export demand from China and
signs that the U.S. harvest is winding down triggered a round of
	

		

			
ADVERTISEMENT
			
				
	

	

			
	
	
short-covering.
    At the CBOT, September corn settled up 18-1/2 cents at
$5.51-3/4 a bushel, while new-crop December ended up
21-1/4 cents at $5.21-3/4. 
    August soybeans rose 12-3/4 cents to end at $14.68-1/4
per bushel, and new-crop November was up 24 cents at
$12.76-1/4. CBOT September wheat ended up 14-1/2 cents at
$6.77-1/2 per bushel.
    Weather was in the spotlight, with forecasts calling for
potentially stressful hot, dry conditions in the southwestern
Corn Belt later this month as the corn crop enters its critical
pollination phase. 
    Meteorologist Don Keeney of MDA Weather Services said he
expected highs in the mid-90s degrees Fahrenheit and no rain in
southern Iowa, Missouri, southwestern Illinois, eastern
Nebraska, the northern Delta and Kansas for at least the next 15
days. 
    "It would be yield- and production-impacting weather if we
would have that materialize," said Mike Zuzolo of Global
Commodity Analytics in Lafayette, Indiana. "Both corn and bean
crops are too small in that region to tolerate that kind of
heat."
    Despite planting delays this spring, U.S. corn and soybeans
have benefited from favorable weather in recent weeks. The U.S.
Department of Agriculture on Monday said 68 percent of the corn
	

		

			
ADVERTISEMENT
			
				
	

	

			
	
	
crop was rated in good to excellent condition, up from 67
percent a week earlier.
    For soybeans, the government rated 67 percent of the crop as
good to excellent, unchanged from the previous week and the
highest rating for early July since 2004. 
    Optimism about crop prospects pressed CBOT December corn
 to a 2-1/2-year low last week. 
    Weekly data from the U.S. Commodity Futures Trading
Commission released on Monday showed that speculators sharply
expanded their net short position in CBOT corn in the week ended
July 2, leaving the market ripe for a short-covering bounce.
 
    "Maybe we got ahead of ourselves, pricing a record crop into
the balance sheet, and we are seeing short-covering activity
there," said Shawn McCambridge, a grains analyst with Jefferies
Bache in Chicago.
    
    WHEAT CLIMBS ON EXPORT DEMAND
    Wheat also rose on short-covering as traders continued to
digest news that China bought more than 1.3 million tonnes of
U.S. wheat in the past week. 
    "We have been oversold for several sessions, and we have had
good soft wheat sales to China, so that rekindled some of that
supportive environment," said McCambridge.
    Also, the U.S. winter wheat harvest was winding down in the
	

		

			
ADVERTISEMENT
			
				
	

	

			
	
	
breadbasket of the southern Plains, signaling a seasonal market
rebound. The USDA said the harvest in Kansas, the biggest U.S.
winter wheat producer, was 87 percent complete by Sunday.
Nationally, the U.S. winter wheat harvest was 57 percent
finished, behind the five-year average of 64 percent.
    "You expect to see a bottom, seasonally, in the first week
of July, when harvest is going and all the bearish news is in,"
said J. Mark Kinoff, president of Ceres Hedge in Chicago.
    Traders were also adjusting positions ahead of the USDA's
monthly supply/demand reports due Thursday, which could show
smaller wheat forecasts for Russia. Two leading analysts lowered
their estimates of Russia's 2013 wheat crop on Monday due to
drought. 
    "The market will watch closely for Thursday's USDA report
and their take on Russian production in wheat," analyst FCStone
said in a daily note. 

    
 Prices at 3:31 p.m. CDT (2031 GMT)      
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 CBOT corn                  551.75    18.50   3.5%  -21.0%
 CBOT soy                  1468.25    12.75   0.9%    3.5%
 CBOT meal                  448.90     6.80   1.5%    6.7%
 CBOT soyoil                 47.02     0.06   0.1%   -4.4%
 CBOT wheat                 677.50    14.50   2.2%  -12.9%
 CBOT rice                 1519.50    39.00   2.6%    2.3%
 EU wheat                   196.50     3.00   1.6%  -21.5%
 
 US crude                   104.16     1.02   1.0%   13.4%
 Dow Jones                  15,300       76   0.5%   16.8%
 Gold                      1249.39    13.50   1.1%  -25.4%
 Euro/dollar                1.2780   -0.009  -0.7%   -3.1%
 Dollar Index              84.6360   0.4430   0.5%    6.1%
 Baltic Freight               1120        5   0.5%   60.2%
 
 (Additional reporting by Ivana Sekularac in Amsterdam and
Naveen Thukral in Singapore; Editing by David Evans and John
Wallace; Editing by Diane Craft)