GRAINS-Soybeans climb on strong demand, tight supply outlook

* Outlook for tighter U.S. supply, strong demand boost soy

* China soy imports fall in February

* Wheat retreats after rally on Thursday

(Updates with U.S. trading, previous AMSTERDAM/SINGAPORE) CHICAGO, March 8 (Reuters) - U.S. soybean futures edged higher on Friday, underpinned by strong demand and expectations the U.S. government will tighten its supply outlook. Traders were waiting for the U.S. Department of Agriculture to issue a monthly crop report at 11 a.m. CST (1700 GMT) which is expected to reduce the outlook for U.S. soybean inventories and harvests in South America. Demand for the oilseed has been shifting to the United States from Brazil as port delays have slowed the flow of soybeans from South America. Soybeans from new crops in Brazil and Argentina are urgently needed to replenish tight global supplies after the worst U.S. drought in 50 years reduced last year's U.S. harvest. "More U.S. beans may be purchased over the near term due to China's inability to procure adequate South American supplies," said Joseph Vaclavik, president of Standard Grain. China, the world's biggest soy buyer, imported 2.9 million tonnes of the oilseed in February, down 24.3 percent from a year earlier, figures from the General Administration of Customs of China showed. The decline last month indicates that China will need to accelerate its purchases in the coming months to replenish its supplies, according to analysts at Germany's Commerzbank. The flow of soybeans from South America could slow even further as Brazilian dock workers are planning a 24-hour nationwide strike on March 19, traders said. Soybeans are up 3.2 percent this week, the market's third consecutive week of gains, and corn is down 1.3 percent after climbing almost 5 percent last week. Wheat was down 3.6 percent for the week. On Friday, Chicago Board of Trade most-active May soybeans gained 0.4 percent to $14.79-1/4 a bushel by 9:50 CST (1550 GMT), while May corn rose 0.2 percent to $6.92-1/2 a bushel. The most-actively traded wheat contract retreated after it posted its biggest one-day gain since mid-January on Thursday, and corn firmed with investors squaring positions ahead of the supply-demand report. "We are seeing some pre-positioning ahead of the USDA report," said Erin FtizPatric, Rabobank analyst. May wheat slipped 0.2 percent to $6.94-1/4 a bushel.

Prices at 9:54 a.m. CST (1554 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 715.00 3.50 0.5% 2.4% CBOT soy 1512.75 9.25 0.6% 6.6% CBOT meal 441.40 5.40 1.2% 4.9% CBOT soyoil 50.28 -0.12 -0.2% 2.3% CBOT wheat 687.75 1.00 0.2% -11.6% CBOT rice .00 0.00 0.0% -100.0% EU wheat 237.75 -0.50 -0.2% -5.0%US crude 91.24 -0.32 -0.4% -0.6% Dow Jones 14,358 28 0.2% 9.6% Gold 1576.84 -1.56 -0.1% -5.8% Euro/dollar 1.2989 -0.0115 -0.9% -1.6% Dollar Index 82.7770 0.6960 0.9% 3.8% Baltic Freight 843 9 1.1% 20.6% * All grain and oilseed prices for second position. Paris

futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.

(Additional reporting by Naveen Thukral in Singapore and Ivana Sekularac; Editing by Keiron Henderson and Jim Marshall)