GRAINS-Chinese demand supports soybeans; corn, wheat weak

* Soybean futures rally on strong export demand

* Weak dollar weighs on corn, wheat prices

(Recasts to include U.S. trading session, new quotes, byline, changes dateline from pvs SINGAPORE/PARIS)

By Mark Weinraub

CHICAGO (Reuters) - U.S. soybean futures rose Friday amid persistent strong buying demand from China, overcoming the bearish effects of a rallying dollar and weakness in the crude oil market, traders said.

Concerns about crop development in South America also has helped support soybeans, which have rallied about 6.4 percent this week, despite expectations for a record crop in the United States.

"The soybeans, it is still the China syndrome," said Don Roose, analyst with U.S. Commodities in West Des Moines, Iowa. "China has this relentless appetite to buy beans. You have a big demand ... with just enough dryness in Argentina to keep this balanced."

Corn and wheat futures weakened Friday as the cautious mood in outside markets turned attention back to heavy fundamentals.

The dollar strengthened on Friday as investors scaled back perceived higher-risk investments, putting pressure on dollar-priced commodities like oil and grains. [FRX/] [O/R]

At 11:01 a.m. CST (1701 GMT), Chicago Board of Trade January soybeans <SF0> were up 9-1/4 cents at $10.48-1/4 a bushel.

China, the world's biggest soybean importer, has bought more than 16 million tonnes of U.S. soybeans and imports in November were expected to pick up to 3.5 million tonnes, from 2.52 million tonnes in October, according to the China National Grain and Oils Information Centre.

CBOT December wheat was down 4-1/2 cents at $5.58 a bushel, while corn for December delivery dropped 1-3/4 cents to $3.93-1/4 a bushel.

Profit taking was adding pressure to both corn and wheat as prices rallied earlier in the week. The increased prices have hurt the competitiveness of U.S wheat on the world market, exacerbating heavy supplies.

"This rally has made U.S. wheat uncompetitive in international markets," Emmanuel Jayet, head of agricultural research at Societe Generale, told Reuters Insider, saying U.S. wheat exports were down about 30 percent versus a year ago.

"The French origin or the Russian origin are less expensive for North African buyers, for example."

Corn and wheat were not benefiting from the bullish fundamentals that allowed soybeans to thrive despite headwinds from outside markets.

"We are bearish on corn and wheat, the wheat market is pretty overvalued," said Peter McGuire, managing director of CWA Global Markets. "We are looking at wheat at $5.30 (a bushel) in the short term and the corn market at around $3.70 (a bushel)."

Corn prices remained weak despite heavy open interest on the options market in the $4 strike price. CBOT December agriculture options will expire at the close Friday.

A U.S. Agriculture Department announcement Friday morning that exporters had sold 734,000 tonnes of U.S. corn to Mexico also failed to spur the market higher. (Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Christian Wiessner)

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