Xx GRAINS-Wheat rallies on U.S. export data but corn retreats

* Weekly U.S. wheat sales data prompts short-covering

* Corn turns lower, soy pares gains on Argentine weather

* Updated forecast model shows more rain for Argentina

* Wheat, corn on track for weekly losses; soy shows gain

(Updates prices, adds comments) CHICAGO, Jan 25 (Reuters) - Wheat futures rose on Friday, halting a three-day slide as better-than-expected weekly U.S. export sales triggered a round of short-covering, but the market was still on track for a weekly loss. Corn fell and soybeans were mixed, erasing early gains as updated weather forecasting models showed better rains for crop areas of Argentina. At the Chicago Board of Trade as of 11:36 a.m. CST (1736 GMT), March wheat was up 4-1/2 cents, or 0.6 percent, at $7.73 per bushel. March corn was down 3-1/4 cents, or 0.5 percent, at $7.21 a bushel and March soybeans were up 2 cents, 0.1 percent, at $14.37-1/4 a bushel. Wheat climbed after the U.S. Department of Agriculture reported export sales of U.S. wheat in the latest week at 647,500 tonnes, including 572,500 tonnes for the current marketing year that began June 1, 2012. The combined-year total topped a range of trade expectations for 350,000 to 550,000 tonnes. "The export sales today were super for wheat," said Jack Scoville, grains analyst at The Price Group in Chicago. "The wheat demand for soft red wheat ought to be picking up, too, because it's relatively cheap," Scoville said. Also, commodity funds hold a net short position in CBOT wheat, leaving the market open to periodic bouts of short-covering. Ongoing concerns about dry conditions in the southern U.S. Plains hard winter wheat belt added support, buoying Kansas City Board of Trade hard wheat futures. Kansas is generally the top U.S. wheat-growing state, but the new crop planted last fall has been struggling with a lack of soil moisture. Parts of the central and southeastern Plains should receive precipitation in the first half of next week, the Commodity Weather Group said in a daily note to clients. "However," CWG said, "amounts will be too light in the Plains for notable drought relief, and the outlook is a bit drier in the northwestern Midwest today as well." Despite Friday's rally, CBOT March wheat was on track for a weekly loss of 2.2 percent, following a two-week advance.

CORN FALLS, SOY PARES GAINS ON ARGENTINA WEATHER Corn prices fell after updated weather forecasting models projected increased rain in Argentina, the world's No. 3 exporter of soybeans and corn. More than a month of consistently hot and sunny weather has left Argentine farmers on edge about crop prospects. The main U.S. and European weather forecasting models have shown conflicting views about the likelihood of rain in Argentina's crop areas in early February, but the midday model run of the U.S. model looked wetter. "The Argentine weather is turning wetter, and it's pressuring corn and soybeans," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana. Soybeans had underlying support from some light technical buying after early attempts to sell the market stalled. The March soybean contract dipped to $14.26 in early moves but failed to drop below chart support at the contract's 50-day moving average near $14.25. Firm cash soy markets added strength. Cash basis bids for soybeans shipped by barge to the U.S. Gulf export market rose by 2 cents, to 110 cents over the value of the CBOT March futures contract. Soybeans have added 0.6 percent this week, the market's third straight week of gains, while corn is down 0.9 percent this week after rallying for the two previous weeks.

Prices at 11:37 a.m. CST (1737 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 720.75 -3.50 -0.5% 3.2% CBOT soy 1437.50 2.25 0.2% 1.3% CBOT meal 415.00 0.30 0.1% -1.3% CBOT soyoil 52.11 0.00 0.0% 6.0% CBOT wheat 773.50 5.00 0.7% -0.6% CBOT rice 1538.50 10.00 0.7% 3.5% EU wheat 247.00 0.25 0.1% -1.3%US crude 95.91 -0.04 0.0% 4.5% Dow Jones 13,876 51 0.4% 5.9% Gold 1658.61 -8.75 -0.5% -0.9% Euro/dollar 1.3459 0.0085 0.6% 2.0% Dollar Index 79.7940 -0.1550 -0.2% 0.0% Baltic Freight 798 -10 -1.2% 14.2%

(Reporting by Julie Ingwersen; Additional reporting by Ivana Sekularac in Amsterdam and Naveen Thukral in Singapore; Editing