By Tom Polansek and Michael Hirtzer

(Reuters) - When U.S. grain markets suddenly began moving higher last Monday morning, traders pointed to tweets from an annual crop tour that detailed the damage, both in words and pictures, of the worst drought to hit the United States in 56 years.

Tweets from the southeast corner of South Dakota, where few traders ever venture, were particularly telling. The drought, which has devastated corn and soybeans in the Midwest farm belt, was not thought to have caused as much damage there. Tour participants used Twitter to tell their followers how wrong they were.

When the tweets began flying under the category #pftour12, traders began taking positions in the futures markets at the Chicago Board of Trade in a way not seen before in the 20-year history of the Pro Farmer Midwest Crop Tour, which gives industry players a chance to see crop conditions first hand.

"Lots of missing ears, and the ones we found were tiny!" shouted a tweet from Lincoln County in far southeast South Dakota that was published on the Twitter account of AgWeb.com, the online home of Pro Farmer, an agricultural advisory firm.

The tweet linked to a photo showing stunted corn ears that were missing kernels, a sight so unusual that it prompted a follower to reply asking whether there was a nuclear reactor nearby.

Country Hedging, a brokerage, had one employee tweeting on each of the crop tour's eastern and western legs to keep clients informed as the tour traveled through seven states to inspect fields.

The company felt the tour "would be extremely important because of the situation the crop was under and that the world would be watching much more closely," said Lonnie Wells, an associate for Russell Consulting Group and longtime financial advisor who tweeted for the first time on the tour.

Country Hedging owns Russell.

"I think people are dying to have some boots on the ground," Wells told Reuters on the tour last week.

"People can follow along almost like they were in the car with you," he said, referring to the way tour participants ride in cars from field to field to inspect corn and soybeans.

TOUR ATTRACTS NEW FOLLOWERS

Indeed, the number of people following tweets from the tour was higher than ever this year, participants said. Pro Farmer also registered a record number of physical participants.

Pro Farmer Editor Chip Flory's following on Twitter increased to more than 2,400 on Tuesday from 2,165 on Monday, when the tour began, because he was tweeting from the fields.

Flory, who tweets under the handle @ChipFlory, marveled on the social media site about the early start to the corn harvest in Nebraska and noted how non-irrigated fields were much worse off than irrigated fields.

He said he tweeted to share information from the road and publicize the tour.

"Some of the newer users on Twitter may be looking at the crop tour as their first opportunity to put something meaningful out there," he said.

Still, Flory worries about impacting grain prices with his tweets. Outside of the crop tour, he limits his tweets during active trading hours.

Many users approach Twitter cautiously because they do not always know the true identity of the author of the tweets they are reading.

Still, the tour's findings whipsawed markets as various tweets from crop scouts either topped or fell short of trade expectations.

"A WHOLE LOT OF UGLY"

Well-known grain analyst Doug Jackson of brokerage INTL FCStone emailed clients a daily round-up of tour-related tweets that kept them abreast of the running conversation online.

Brian Grete, a senior market analyst for Pro Farmer, maintained a stream of commentary online. Passing a corn field in Blackford County in eastern Indiana, he tweeted it was "a whole lot of ugly -- 3 feet tall and lacking ears".

Peter Meyer, senior director of agricultural commodities for PIRA, tweeted from the tour that "Indiana a mess".

Later, he told his more than 1,300 Twitter followers that he spoke to a farmer in central Illinois who said "all his corn has blown over. The entire farm".

"Some of the run-up in the markets this (last) week has been because of that information, maybe not exclusively because of Twitter, but information from the tour in general," said Jason Holthaus, a market analyst for Country Hedging who was not on the tour.

"Traders are getting information faster," he said.

(Additional reporting by Karl Plume in Chicago; editing by Andrew Hay)