GRAINS-Prices inch up, markets still headed for weekly losses

* Wheat on track for fourth straight weekly loss

* Corn looks to snap 10-day losing streak

* U.S. wheat sales to Brazil, Japan support

* Moisture headed for U.S. Plains, drought fears remain

(Adds analyst's comment, midday prices) WINNIPEG, Manitoba, Feb 15 (Reuters) - Grain prices inched higher on Friday in a modest correction, driven by improving export prospects due to weaker prices, after trading lower this week because of better crop weather. Corn, wheat and soybeans remained on course for weekly losses. Gains were trimmed near midday as welcome precipitation was headed for the U.S. Plains hard red winter wheat region and parts of Argentina. "We've been on an extended slide this week and we're just cleaning up a little bit in front of the three-day weekend (with) a little short-covering," said Terry Linn, analyst at The Linn Group. Wheat also drew support from the sale of at least 100,000 tonnes of U.S. hard red winter wheat to Brazil and a sale of U.S. wheat to Japan, Linn said. Chicago Board of Trade March wheat gained 5 cents, or 0.7 percent, to $7.37 a bushel at 11:36 a.m. CST (1736 GMT). The contract hit $7.22-1/2 a bushel on Wednesday, the lowest for a front month in more than seven months, and is on track for a weekly loss of about 2.5 percent. The U.S. Department of Agriculture (USDA) on Thursday reported last week's export sales of wheat for the current and new marketing year at 706,300 tonnes, a seven-week high that topped trade expectations for 275,000 to 400,000 tonnes. "Last night's higher export numbers are supporting wheat, and despite some snow and rains concerns still remain about the impact of the dry winter in the U.S.," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia. Some additional drought relief is expected by the middle of next week in the U.S. Plains hard red winter wheat region, with significant snow and rain forecast for Kansas and Nebraska, said Drew Lerner, an agricultural meteorologist for World Weather Inc. But while the moisture would ease dry weather stress on the wintering wheat crop, much more rain is necessary to boost production prospects, he said. Concern that dry weather in the U.S. could disrupt plantings this spring helped underpin both corn and soybean prices. U.S. farmers will plant crops this spring as the threat of a drought looms over prime farmland from the Mississippi River to the Rocky Mountains. Grain supplies are already tight from drought losses in 2012. CBOT March corn rose 2-1/4 cents, or 0.3 percent, at $6.97 a bushel, but looked set for a weekly loss of around 1.7 percent. A gain would snap a 10-session losing streak, corn's longest in 5-1/2 years. The driest areas in Argentina, especially the main corn producing region in the southwest, are poised to receive additional much-needed rainfall overnight Friday and Saturday but not enough to provide meaningful drought relief, Lerner said. "It's kind of a wait and see what happens (attitude) with the Argentine weather system that's expected to roll through over the weekend," said Terry Reilly, senior commodity analyst at Futures International. "And we'll see if central and northern Brazil will stay dry enough for active harvesting." March soybeans rose 1 cent to $14.19 a bushel and were on track for a weekly loss of 2.3 percent. The U.S. government pegged soybean sales at 235,900 tonnes, including net cancellations of 109,100 tonnes for 2012/13 and net sales of 345,000 tonnes for 2013/14. Trade estimates were for 700,000 to 1.1 million tonnes. The USDA reported on Friday the cancellation of 250,000 tonnes of U.S. soybeans sold to unknown destinations this marketing year, and the news likely caused some long investors to close positions, Reilly said. Brazil is positioned to surpass the United States as the world's biggest soybean producer. Its harvest is 12 percent complete, above the five-year average of 7 percent, analyst Celeres said earlier this week. "There's bearish news for oilseeds and that bearish news is the South American harvest," Mathews said.

Prices at 11:36 a.m. CST (1736 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 697.00 2.25 0.3% -0.2% CBOT soy 1419.00 1.00 0.1% 0.0% CBOT meal 408.10 0.90 0.2% -3.0% CBOT soyoil 51.47 -0.23 -0.4% 4.7% CBOT wheat 737.00 5.00 0.7% -5.3% CBOT rice 1579.00 7.00 0.5% 6.3% EU wheat 244.00 1.50 0.6% -2.5%US crude 95.60 -1.71 -1.8% 4.1% Dow Jones 13,958 -16 -0.1% 6.5% Gold 1607.51 -26.95 -1.6% -4.0% Euro/dollar 1.3351 -0.0009 -0.1% 1.2% Dollar Index 80.5230 0.0650 0.1% 0.9% Baltic Freight 753 5 0.7% 7.7%

(Additional reporting by Sam Nelson in Chicago, Nigel Hunt in London and Mayank Bhardwaj in New Delhi,; Editing by Alison Birrane, Jim Marshall and Bob Burgdorfer)