* Crop ratings expected to drop further
* Declines could spur fresh gains in corn, soy
* Spotty rains for Midwest this week
* Slow global growth could temper rally
By K.T. Arasu
CHICAGO, July 15 (Reuters) - Fresh evidence on Monday that the U.S. corn and soybean crops are continuing to wilt in an unrelenting drought across the Midwest could sustain the blistering rally in grains futures this week.
A lack of meaningful rain in areas hardest hit by the worst drought in nearly 25 years shrinks the crops in the world's top corn and soybean exporter.
On Friday, forecasters said there was little relief in sight this week, with temperatures set to return to the high 90s to 100 degrees Fahrenheit in the western Corn Belt, and rise to the upper 90s F in the central-eastern Midwest.
The U.S. Department of Agriculture's weekly update of the state of the crops on Monday will offer traders price direction, with expectations for the amount of the corn and soybeans in good-to-excellent shape to drop 3 to 5 percentage points.
The corn and soybeans crop were rated at a 25-year low, with just 40 percent in good-to-excellent conditions of July 8.
"My guess is that ratings in the good-to-excellent category will decline 5 to 6 points," said Michael Cordonnier of Soybean and Corn Advisory consultant in Hinsdale, Illinois.
Cordonnier, an agronomist who is closely watched by traders for his opinion on yield counts, said he was set to lower his corn yield estimate which currently stands at 146 bushels per acre -- the same as the USDA's after the agency slashed its estimate by an unprecedented 20 bushels on Wednesday.
He said for much of the corn crop that was planted later in the season, it was already too far gone for the plants to recover. Cordonnier said early planted corn crop could be in jeopardy too without timely rains.
"If this corn doesn't get good moisture in two weeks, it's done," he said.
After getting off to a record planting pace amid one of the mildest winters in decades, the corn crop ran into trouble when it turned dry and temperatures hit triple-digits.
Chicago Board of Trade corn futures have rallied 37 percent from its summer low, coming within striking distance on Friday of its all-time high of $7.99-3/4 per bushels.
CBOT soy hit a record high of $16.79-1/2 on July 9 and matched it two days later.
Meteorologist Joel Widenor, director of agricultural services at Commodity Weather Group said high heat could return to the western Midwest on Monday and Tuesday, while temperatures would climb to the upper 90s degrees Fahrenheit in the eastern part of the region.
He said dry weather conditions would remain status quo this week in the northern and eastern edges of the Midwest through Minnesota, Iowa and Indiana. He said showers over the next 15 days from Friday were largely not well defined.
"The only area where we see more organized rains are in parts of southern Ohio and southern Indiana," he added.
Grains analyst Don Roose of U.S. Commodities in West Des Moines, Iowa, said high grain prices were at levels that could ration demand from end-users.
"The final phase of a bull market is when end-users want ownership. This is what we are seeing now. They want the product now. They do not want to shut down their facilities," he said, alluding to the rally in grains.
Roose said the markets have factored in a corn yield of 138 to 140 bushels per acre, and 39 to 40 for soybeans.
He expected the USDA to revise down its estimate of how many acres of corn and soybeans will finally be harvested by farmers this year in the aftermath of the drought.
Grains analyst Dale Durchholz of Agrivisor in Bloomington, Illinois, said slowing global growth, especially in China, could temper the rally in grains.
"The world economy is not real healthy. We are struggling to grow, as is Europe," he said, adding that the slowed growth could dent demand from end users.
He also pointed out there were wild speculations in the market that corn prices could hit $10 per bushel and soybeans $20. "This kind of silly talk could probably point to prices being close to a peak."