GRAINS-Corn rises from contract lows on short covering, bargain buying

By Tom Polansek

CHICAGO, July 14 (Reuters) - Chicago Board of Trade corn futures rebounded on bargain-buying and short covering on Monday, after sliding to contract lows on expectations for strong U.S. output.

Soybean futures fell to a three-month low in the most-active contract Sv1 before trading nearly unchanged.

"You can only sell stuff off for so long without getting some sort of a bounce," said Sherman Newlin, an analyst with Risk Management Commodities. "I think that's pretty much all it is."

Most-active corn futures Cv1 were up 3 cents at $4.15-1/4 a bushel by 10:35 a.m. CDT (1535 GMT), and soybeans Sv1 were flat at $10.07-1/4 a bushel. Wheat futures Wv1 fell 4-1/4 cents to $5.40-3/4 a bushel.

Weather forecasts continued to look favorable for U.S. corn and soy crops, and Commodity Weather Group said rain will reduce dryness in the important Midwest region this week.

The U.S. Department of Agriculture may raise its good-excellent crop ratings in a weekly progress report due after the markets close, traders said.

"For corn, in particular, there have been a lot of yield models out there that have been projecting some pretty hefty numbers," Newlin said. "I think the trade has already digested that and has priced that in for the time being."

On Tuesday, the National Oilseed Processors Association is slated to release June soybean crush data. Analysts polled by Reuters expect the U.S. crush to hit a June record of 185.195 million bushels.

Traders were grappling with uncertainty over export demand amid worries that grain importers will retaliate against U.S. President Donald Trump's trade tariffs by restricting purchases of American farm goods.

Trump stepped up his trade war over the weekend with threats to impose 30% duties on most goods from the EU and Mexico from next month.

China, the world's biggest soybean importer, imported record volumes of the oilseed for the month of June, a Reuters calculation of customs data showed, driven by a surge in shipments from top supplier Brazil.

For wheat, big buyer Algeria issued a new tender, while Taiwan issued a tender to buy U.S. wheat.