GRAINS-Corn jumps to one-week high ahead of major USDA reports

* Traders buy back previously sold positions in corn

* Soybeans struggle amid forecasts for big harvest in Brazil

* Coming up: export sales Thursday, key crop reports Friday

(Adds closing prices) CHICAGO, Jan 9 (Reuters) - U.S. corn futures rose to a one-week high on Wednesday as traders evened up positions before the federal government releases major crop reports at the end of the week, while wheat and soybeans sagged. Traders bought back previously sold positions in the corn market after making money recently on bets that prices would decline. They said Friday's U.S. Department of Agriculture reports on supply-demand and quarterly U.S. grain inventories could change trends in the market. Corn has swung by the maximum daily trading limit six years in a row on the day of the department's January announcements. "Going into a major report, we're trying to rebalance a bit," said Don Roose, president of U.S. Commodities. "It's going to be all about this report that gives us a clue on market direction." Chicago Board of Trade March corn jumped 5-1/2 cents, or 0.8 percent, to $6.94-1/4 a bushel. The market has rebounded 2 percent since hitting a six-month low on Monday on concerns about sluggish demand. "With the uncertainty that a report brings, a lot of the traders who are short are willing to get out of those positions and get flat," said Brian Hoops, president of Midwest Market Solutions.

COMPETITION WITH BRAZIL Expectations that a record-large soybean harvest in Brazil will reduce demand for U.S. oilseeds weighed on soy prices. March soybeans shed 1 cent, or 0.1 percent, to $13.85-1/2 a bushel. Brazil, which competes with the United States for export sales, on Wednesday raised its soybean production forecast to a record 82.7 million tonnes, up 0.1 percent from its estimate last month and 24 percent above last year's harvest.

Private U.S. exporters reported the sale of 120,000 tonnes of optional-origin soybeans to top importer China for delivery next marketing year, according to USDA. Optional-origin sales allow for the commodity to come from the United States or other nations. Hoops said U.S. exporters will likely book South American soybeans for shipment to China, a "telling" sign that buyers are shifting purchases away from the United States. On Friday, USDA is expected to raise its forecast for Brazil's soybean harvest by 0.9 percent from last month, to 81.8 million tonnes, according to a Reuters poll.

DEMAND EYED Traders on Thursday will assess USDA's weekly export sales data. Sales from last week are projected at 200,000 to 400,000 tonnes for soybeans, 325,000 to 425,000 tonnes for wheat, and 100,000 to 200,000 tonnes for corn.

Corn futures were underpinned by an increase in global demand after a lull in purchase tenders over the holidays and the recent decline in prices, traders said. South Korea's Feed Leaders Committee (FLC) purchased 69,000 tonnes of corn, 55,000 tonnes of feed wheat, and 45,000 tonnes of soymeal in a tender on Wednesday, traders said. South Korea's Major Feedmill Group (MFG) on Tuesday bought 137,000 tonnes of corn for arrival in May, while the Korea Feed Association (KFA) bought 110,000 tonnes of corn likely to be sourced from South America. A group of private Israeli buyers issued international tenders on Tuesday to purchase 135,000 tonnes of corn and up to 50,000 tonnes of feed wheat. Wheat futures weakened, with the March contract sliding 5 cents, or 0.7 percent, to $7.45-1/2 per bushel.

Prices at 2:56 p.m. CST (2056 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 694.25 5.50 0.8% 7.4% CBOT soy 1385.50 -1.00 -0.1% 15.6% CBOT meal 411.30 0.70 0.2% 32.9% CBOT soyoil 49.24 0.10 0.2% -5.5% CBOT wheat 745.50 -5.00 -0.7% 14.2% CBOT rice 1500.00 4.00 0.3% 2.7% EU wheat 254.75 0.00 0.0% 25.8%US crude 93.10 -0.05 -0.1% -5.8% Dow Jones 13,383 54 0.4% 9.5% Gold 1656.84 -1.76 -0.1% 5.9% Euro/dollar 1.3063 -0.0017 -0.1% 0.9% Dollar Index 80.5180 0.1780 0.2% 0.4% Baltic Freight 743 9 1.2% -57.2%

(Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore; Editing by John Wallace, Bob Burgdorfer and Sofina Mirza-Reid)