* U.S. corn ethanol 2014 mandate likely to be lower
* China cancels a cargo of U.S. corn over GMO issue
* Export demand buoys soybean market
(Updates to include close of U.S. trading, adds details of a corn cargo canceled by China)
CHICAGO, Nov 18 (Reuters) - Chicago Board of Trade corn futures fell to a fresh three-year low on Monday on pressure from a proposal to lower the use of corn-based ethanol in the United States and on news China rejected a cargo of U.S. corn which contained a genetically modified variety not approved for import.
Corn fell for the fifth consecutive session and at a 2.4 percent drop, it was the biggest one day decline this month.
Soybeans bucked the trend and gained amid a weak dollar , brisk export sales and a big number for soy in the U.S. Department of Agriculture's weekly export inspections report.
Wheat turned down on spillover selling from the falling corn market.
CBOT December corn closed 10 cents per bushel lower at $4.12, January soybeans were up 7 at $12.87-1/2 and December wheat was down 2-1/4 cents at $6.42-1/4.
"Corn is king today, all eyes are on corn. There is left over nervousness from Friday about what the Renewable Fuel Standard will be," said Sterling Smith, futures specialist for Citigroup.
The U.S. Environmental Protection Agency (EPA) proposed on Friday to slash federal requirements for U.S. biofuel next year, including corn-based ethanol.
Traders said some pressure on corn also surfaced following news that China had canceled a cargo of U.S. corn because it contained Syngenta AG's unapproved Agrisure Viptera corn.
However, the lion's share of weight on the corn market was stemming from the harvest of a likely record large U.S. corn crop and concerns corn use may be trimmed if the required amount of ethanol to be used in fuel is reduced.
"The corn weakness can be attributed to the EPA proposal," said Luke Mathews, commodities strategist at the Commonwealth Bank of Australia.
"Outside of that, we do need to recognize that the 2013/14 harvest has replenished global supplies. Even without the EPA announcement, there is little reason for the corn market to show strength at the moment."
The EPA did not propose a specific 2014 volume for ethanol made from corn. But its proposed change in advanced biofuels implies a corn ethanol 2014 mandate of 12.7 billion to 13.2 billion gallons (48.1-50 billion liters), down from the previous mandate of 14.4 billion gallons.
"This would mean lower demand for corn, just at the time when the U.S. is harvesting a record corn crop. It is likely to take months for a decision to be reached, however," Commerzbank said in a market note.
CBOT soybean prices were higher due to strong demand but gains were slowed by improving prospects for crops in South America.
Informa on Friday estimated next year's U.S. soybean plantings at a record-high 83.8 million acres (33.9 million hectares), below its previous forecast of 83.9 million but still up from 76.5 million seeded in 2013.
(Additional reporting by Nigel Hunt in London and Colin Packham in Sydney; Editing by Marguerita Choy)