* Corn rises nearly 1% after hitting Sep 2016 low on Wednesday
* Wheat rallies on expectations of strong demand
* Soybeans firm for third straight session
By Colin Packham
SYDNEY, March 19 (Reuters) - U.S. corn futures rose nearly 1% on Thursday, rebounding from a three-year low hit in the previous session, as a surge in oil prices raised hopes for an uptick in demand for oil-substitute ethanol.
Prices of corn, however, were capped by worries about the impact of the coronavirus pandemic that has caused widespread shutdowns.
Wheat rose more than 0.5% on expectations for stronger demand for stables such as pasta, while soybeans were on course to extend gains into a third consecutive session.
The most active corn futures on the Chicago Board Of Trade were up 0.7% at $3.37-3/4 a bushel by 0309 GMT, having slumped 2.5% on Wednesday when prices fell to the September 2016 low of $3.32 a bushel.
Analysts said corn was drawing support from stronger oil prices.
Oil prices surged as much as nearly 20% on Thursday, bouncing back from days of heavy losses in a relief rally, yet proved short-lived as gains eased throughout the day.
“The oil price, and so U.S. ethanol use, issue continues,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
The ethanol market, which accounts for about 39% of U.S. corn usage, has been volatile amid the spread of the coronavirus pandemic.
The rise in prices on Thursday came as a growing number of central banks vowed stimulus efforts.
The European Central Bank on Wednesday pledged to buy 750 billion euro ($820 billion) in bonds through 2020.
The most active soybean futures were up 0.2% at $8.27-1/4 a bushel, having firmed 0.2% on Wednesday.
The most active wheat futures were up 0.5% at $5.11 a bushel, having closed 1.8% higher in the previous session.
Analysts said wheat was drawing support from increased demand for food as people bulk buy due to expectations of shortages amid the coronavirus outbreak.
U.S. Agriculture Department on Monday said good-to-excellent ratings for the Kansas wheat crop fell 1 percentage point to 46%.
$1 = 0.9185 euros Reporting by Colin Packham; Editing by Aditya Soni