GRAINS-Wheat hits 1-month high on soft dollar, crop concerns, and short-covering

CANBERRA, May 21 (Reuters) - Chicago wheat futures climbed to a one-month high on Wednesday, supported by a soft dollar, concerns over northern hemisphere production and a bout of short-covering by speculators.

Corn futures climbed to a one-week high, and soybeans rose on fears that heavy rains may have damaged crops in Argentina.

The most active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.8% at $5.50-1/4 a bushel, as of 0249 GMT, after reaching $5.50-1/2, its highest point since April 23.

CBOT soybeans Sv1 rose 0.4% to $10.56-3/4 a bushel and corn Cv1 was trading 0.3% higher at $4.55-3/4 a bushel.

The U.S. dollar weakened again after cautious remarks about the U.S. economy by Federal Reserve officials. .DXY USD/

Wheat sank to a five-year low of $5.06-1/4 on May 13, pressured by weak demand, abundant supply, and an increase in speculative bearish positions.

But hot and dry weather is threatening crops in China, with temperatures in the wheat-producing region of Henan reaching 40 degrees Celsius (104 degrees Fahrenheit) on Tuesday.

Traders believe that recent frosts in Russia have not caused significant crop damage, but high temperatures and the lack of rain over the coming months are likely to deplete the harvest in Rostov, Russia's largest grain region, the head of the local grain lobby group said.

In the United States, an unexpected decline in winter wheat ratings has reduced optimism about the size of the upcoming harvest.

Speculators' large net short position in CBOT wheat leaves the market vulnerable to short-covering. Heavy buying by funds pushed prices up by 3.2% on Tuesday.

"The magnitude of the price rise (in recent days) indicates demand side drivers in addition to seasonal growing condition challenges," said Dennis Voznesenski, an analyst at Commonwealth Bank in Sydney.

He said he was forecasting higher prices but that prices typically struggle to rise during the mid-year northern hemisphere harvest, which pours new supply onto the market.