GRAINS-Wheat holds near 8-week lows after China cancels purchases from US

CANBERRA/PARIS, Dec 18 (Reuters) - Chicago wheat futures found their footing on Thursday but remained near eight-week lows after China cancelled purchases from the United States and as large harvests in Argentina and Australia poured new grain into a well-supplied market.

Soybean futures were flat after falling on Wednesday when the U.S. Department of Agriculture (USDA) confirmed sales to China and "unknown destinations", and oil prices recovered some ground, supporting biofuel feedstocks.

Corn rose for a second day due to strong U.S. export demand, though pressure from low wheat prices limited gains. Wheat competes with corn in the animal feed market.

The most-active wheat contract on the Chicago Board of Trade (CBOT) Wv1 was up 0.1% at $5.06-1/2 a bushel at 1200 GMT, after falling to $5.04 on Wednesday, its lowest since October 23.

CBOT soybeans Sv1 were unchanged at $10.58-1/4 a bushel, having slipped to a seven-week low of $10.53-1/2 in the previous session. Corn Cv1 was up 0.45% at $4.42-1/2 a bushel.

Wheat and soybean prices have slumped about 10% from highs last month.

The USDA said on Wednesday that exporters had cancelled sales of 132,000 metric tons of U.S. white wheat to China. The reason for the cancellation was not known, but traders said Argentine wheat was available at lower prices.

"Argentinian and Australian crops just keep getting bigger and adding to global supply," said Rod Baker, an analyst at Bendigo Bank Agribusiness Insights.

"Argentina dropped their export taxes also. That's making them very competitive."

Chinese state-owned agribusiness COFCO International said on Saturday it was loading its first bulk commercial shipment of Argentine wheat bound for China, opening a new trade route between the two countries.

CBOT prices have likely fallen far enough to encourage buying, Baker said. "Prices should stabilise around here, and as we move into the new year rise a little."

Progress in peace negotiations to end the war in Ukraine has weighed on wheat prices, but a ceasefire may still be some way off.