GRAINS-Chicago soybeans fall after disappointing US biofuels proposal; corn pulls back

BEIJING, Sept 18 (Reuters) - Chicago soybean futures fell for a second straight session on Thursday, pressured by weaker soy oil prices following a disappointing U.S. biofuel blending proposal and a continued lack of demand from China.

As of 0518 GMT, the most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 lost 0.36% to $10.40 per bushel.

The market came under pressure after Tuesday's U.S. Environmental Protection Agency (EPA) proposal failed to clarify how biofuel blending obligations would be reallocated under the government's Small Refinery Exemption program.

The agency's proposal, which includes a 45-day comment period, shows that the EPA still hasn't finalised biofuel rules, keeping biomass diesel production on hold, analysts have said.

Meanwhile, U.S. farmers are increasingly concerned as they enter the autumn harvest season on low crop prices and a trade war with top buyer China, which has yet to book any U.S. soybean shipments from the new crop.

In response, Republican farm-state lawmakers are urging President Donald Trump's administration to issue economic aid for farmers by the year's end.

On Thursday, the Financial Times, citing Agriculture Secretary Brooke Rollins, reported that the Trump administration is drawing up plans to use tariff revenue to fund a program to support U.S. farmers.

Corn Cv1 eased 0.23% to $4.25-3/4 a bushel amid seasonal harvest pressure. The U.S. Department of Agriculture said this week that 7% of corn had been harvested as of Sunday.

Wheat Wv1 rose 0.05% to $5.28-1/2 a bushel, supported by competitive pricing that sustained brisk export demand, though ample global supply continues to pressure the market.

Ahead of the USDA's weekly export sales report later today, analysts expected U.S. corn export sales in the week ended September 11 at 500,000-1,900,000 metric tons, soybeans at 400,000-1,500,000 tons, and wheat at 300,000-650,000 tons.