GRAINS-Corn flat, wheat edges higher ahead of USDA report

* Corn flat after five sessions of losses

* Brazil to produce record soybean crop

* Coming up: USDA monthly supply-and-demand report; 1700 GMT

(Updates with European trading, changes dateline/byline)

LONDON/SYDNEY, Feb 8 (Reuters) - U.S. corn was flat on Friday, as the market awaited clearer direction from a monthly supply-and-demand report from the U.S. Department of Agriculture later in the day.

Wheat rose, while soybeans edged higher, coming off losses in the previous session.

"There is not much activity today because of the USDA report tonight, but I think the gains are just a little bit of position squaring ahead of that report," said Andrew Woodhouse, grains analyst at Advance Trading Australasia.

March corn edged down 0.1 percent by 1200 GMT to $7.10 a bushel, after touching a four-week low of $7.08-3/4 a bushel. Corn slid 1.5 percent in the previous session.

Corn is down 3.5 percent for the week, its biggest slide since the week ending December 23, when it fell 3.9 percent.

March wheat rose 0.4 percent to $7.59-1/4 a bushel, having closed down 0.7 percent on Thursday. Wheat is down 0.7 percent for the week, its second weekly loss in a row.

March soybeans rose 0.2 percent to $14.89-3/4 a bushel, having closed near unchanged in the previous session. Soybeans are up 1.1 percent for the week.

USDA REPORT EYED

Corn has been weighed down this week by expectations of an easing of low global stocks.

Traders and analysts expect that the USDA will raise its forecast for U.S. corn ending stocks amid slumping demand from exporters and ethanol makers, although the stockpile is likely to remain at a 17-year low.

"We're not really expecting much. Given the level of uncertainty that still exists in South America the USDA are going to make relatively conservative changes to the U.S. balance sheet, for both corn and soybeans," said Chris Gadd, grains analyst at Macquarie.

"Our main expectation is for the USDA to lower US Hard Red Winter wheat exports, they may offset this with increased U.S. feed demand. We certainly aren't expecting the fireworks that we saw in the January report."

Corn was also weighed down by sluggish export demand. The USDA said on Thursday that corn export sales continued their months-long slump, dipping to a one-month low of a net 160,400 tonnes, just a fifth of sales in the same week last year.

The USDA last month forecast U.S. corn exports in the current marketing year at 950 million bushels, a 41-year low, but many traders and analysts expect that outlook to shrink further, possibly on Friday.

Traders remain cautious over soybean supply, with wet weather across South America boosting crop prospects, but forecasts predicting a contraction in production.

Analysts expect the USDA to lower its soybean production outlook.

Despite some forecasts for wet weather in the next few days, Argentina's 2012/13 soy harvest is seen at 50 million tonnes, missing expectations due to dry weather, the Buenos Aires Grains Exchange said on Thursday in its first output forecast.

But Brazil will produce a record 83.4 million tonnes of soybeans this season due to an unprecedented expansion in planted area, the government said, raising its forecast 0.8 percent from 82.7 million tonnes in January.

Wheat drew support from recent export demand, while forecasts for much needed favorable weather across the drought-stricken Plains also underpinned gains.

Snow was forecast for the Northern Plains in the near term, which could offer some relief to the drought areas in western Nebraska, South Dakota and Minnesota, while better rains were expected in the Southern Plains in the six- to 10-day period, the Commodity Weather Group said on Thursday.

Milling wheat futures in Paris were also higher with March up 0.5 percent at 246.25 euros a tonne.

(Editing by William Hardy)