GRAINS-Chicago grains gain with Chinese demand and weather in focus

BEIJING/PARIS, Jan 7 (Reuters) - Chicago grain and soybean futures edged higher Wednesday, recovering from profit-taking in the previous session with support from Chinese purchases of U.S. soybeans and dry conditions affecting U.S. wheat crops.

Traders were also monitoring investor flows linked to annual changes in the composition of commodity indexes and looking ahead to widely tracked supply and demand data from the U.S. Department of Agriculture next Monday.

The most active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.8% at $10.64-1/2 a bushel by 1219 GMT.

The contract has been recovering from a two-month low of $10.38 struck last Friday, though it ended lower on Tuesday after some profit-taking. GRA/

CBOT wheat Wv1 added 0.6% to $5.13-3/4 a bushel, also moving away from a two-month low hit last Friday. CBOT corn Cv1 rose 0.3% to $4.45-1/2 a bushel.

"A sense of firmness remains, with operators awaiting the upcoming USDA report on January 12," Argus Media analysts said in a note. "In soybeans, operators’ attention remains focused on China."

Chinese state stockpiler Sinograin bought 10 U.S. soybean cargoes this week, three traders told Reuters on Tuesday, as the world's top buyer continues purchasing from the U.S. after a trade truce was agreed in late October.

The U.S. Department of Agriculture (USDA) initially confirmed under its reporting system that exporters sold 136,000 metric tons of soybeans to China.

However, the start of what is expected to be a record Brazilian soybean harvest is limiting price momentum for Chicago futures.

The run-up to the USDA's supply and demand data was rekindling doubts about the size of yields from last autumn's U.S. corn harvest, which if lowered could tighten projected U.S. supply at a time of brisk export demand.

"USDA could change its yield estimate for the 2025 crop next Monday, but the trade generally feels much better about the soybean yield than it does the corn yield," said Arlan Suderman, chief commodities economist at StoneX.

Crop conditions data for U.S. wheat kept attention on dry conditions affecting part of the U.S. Plains.

Condition ratings for winter wheat declined during December in Kansas, the top U.S. winter wheat producer, and in several other Plains states, USDA data showed on Tuesday.

However, abundant global supply, including freshly harvested wheat from an expected record crop in Argentina, was keeping a lid on prices, analysts said.