GRAINS-Soybeans fall as hopes for Chinese demand wane; corn, wheat firm

By Heather Schlitz

CHICAGO, Aug 25 (Reuters) - Chicago soybeans fell on Monday after hitting two-month highs on Friday, as industry players lost confidence that Chinese buyers would purchase U.S. soybeans, while dealers assessed exemptions granted to U.S. crude oil refiners for use of soy-based biofuels.

Corn firmed after a crop tour forecast the U.S. harvest below estimates from the U.S. Department of Agriculture. Wheat rose on spillover support from corn futures and hopes of U.S. export sales with Black Sea prices robust.

Chicago Board of Trade most-active soybeans Sv1 were last down 11-1/2 cents to $10.46-3/4 per bushel as of 12:40 p.m. CT (1740 GMT).

Corn Cv1 rose 1/2 cent to $4.12 a bushel, and wheat Wv1 gained 2-3/4 cents to $5.30 a bushel.

On Sunday, Beijing's ambassador to Washington said U.S. protectionism was undermining agricultural cooperation with China and warned that farmers should not bear the price of the trade war between the world's two largest economies.

"Usually in September, China has purchased 14% to 15% of their soybean needs," Dan Basse, president of AgResource, said. "They're not going to be buying tons in the next couple days when they're not even talking."

The U.S. Department of Agriculture was expected to trim its U.S. corn and soybean crop ratings in a weekly report on Monday, analysts said in a Reuters poll, though farmers were still poised to produce large harvests.

The U.S. Environmental Protection Agency on Friday approved most backlogs of requests by small oil refineries for exemptions to compulsory biofuel use, raising concerns over reduced demand for renewable fuels often produced from soy.

Consultancy Pro Farmer on Friday forecast U.S. farmers would harvest a record corn crop, though its estimate put the crop below USDA projections, adding a hint of bullishness to the market.