* Wheat climbs rise on poor crop weather, weak dollar
* Soybeans up, corn down on corn/soy spread unwinding
* Coming up: CFTC Commitments of Traders report Friday (Recasts, updates prices, adds quotes, details)
By Karl Plume
CHICAGO, April 21 (Reuters) - U.S. wheat futures rose 1.8 percent on Thursday as poor weather threatened crops in key production areas of North America and Europe and as the dollar fell to its lowest point in nearly three years.
Corn rebounded from the prior session's 2 percent slide as wet weather stalled early planting in the U.S. Midwest, but prices drifted from early highs amid uncertainty over forecasts calling for drier weather in May.
Soybeans added 1.3 percent as traders unwound corn/soybean spreads they had entered on ideas that the slow start to corn planting would siphon more acres into soy cultivation. Stronger than expected weekly export sales data and a weak dollar added support.
"We're bouncing back on the weather. Despite forecasts for better conditions by the middle of May, the weather looks to be pretty bad through then. And a lower dollar certainly isn't hurting anything either," said Jack Scoville, analyst with The Price Futures Group.
The U.S. dollar on Thursday fell to a near-three-year low against a basket of currencies as investors fretted over low interest rates and the threat of a U.S. credit rating downgrade.
Dollar-denominated commodities such as grains tend to rise when the greenback sinks, partly because it increases the buying power of those holding other currencies.
Corn prices dropped to their lowest levels in nearly three weeks on Wednesday as investors exited long positions on forecasts for drier weather over the U.S. corn belt eased some concerns about delayed spring planting.
Updated forecasts for weekend rains in some areas renewed worries about a late start to seeding at a time when corn stocks are projected to be the tightest since the 1930s.
But some investors sought to unwind their corn/soybean spreads ahead of the three-day weekend, with markets closed on Friday for the Good Friday holiday, leading to choppy trade.
Soybeans climbed to near-two-week highs and were in position for their strongest weekly gain in at least 1-1/2 months, helped by U.S. Department of Agriculture data showing heavier than anticipated export sales last week.
"There were solid export sales, better than expected in spite of all of the cancellation talk. I also think some of them were short beans and didn't want to stay that way going into the weekend," said Dan Dempsey, an analyst for Iowa Gain.
Chicago Board of Trade corn for May added 0.2 percent to $7.34 a bushel by 12:25 p.m. CDT (1725 GMT) while May soybeans rose 1.3 percent to $13.76 a bushel, the largest percentage gain in two weeks.
WEATHER LIFTS WHEAT
CBOT soft red winter wheat futures for May added 1.8 percent to $7.99-1/4 a bushel. The market was led by gains in higher-protein wheat varieties traded on the Kansas City Board of Trade and the Minneapolis Grain Exchange which have been threatened by adverse weather.
Prolonged drought conditions through Texas, Oklahoma and southern areas of Kansas, the top U.S. winter wheat growing state, have left wheat industry experts fearing there is little hope for much of the new wheat crop due to be harvested this summer.
Meanwhile, soggy conditions have delayed the start of spring wheat seeding in the northern U.S. Plains.
KCBT May hard red winter wheat rose 1.4 percent to $9.33 a bushel, while MGE May spring wheat climbed 1.4 percent to $9.53.
CBOT wheat was poised to notch its largest weekly gain since late January, while KCBT and MGE wheat were set for their strongest week since early December. (Additional reporting by Naveen Thukral in Singapore, Michael Hogan in Hamburg, and Sam Nelson in Chicago; editing by Jim Marshall and David Gregorio)