GRAINS-U.S. wheat hovers near 6-1/2 month low, corn edges up
* China rejects two cargoes of U.S. DDGS - Xinhua
* Strong demand helps to widen Paris wheat premium
* U.S. weekly sales data due out at 1330 GMT
(Adds quotes, updates prices)
LONDON, Dec 27 (Reuters) - Wheat futures fell on Friday with prices in Chicago holding just above the prior session's 6-1/2 month low as plentiful supplies kept the market on the defensive.
U.S. corn prices edged up but were set for a weekly loss as China rejected two cargoes of U.S. dried distillers grains (DDGS), a corn by-product, while soybeans advanced as demand remained strong.
"There is plenty of (wheat) supply but those markets which have the demand have been sustained," one European broker said, referring to the widening premium for Paris over Chicago wheat.
March wheat on the Chicago Board of Trade fell 0.1 percent to $6.05-1/4 a bushel by 1203 GMT. The contract slumped to a low of $6.00-3/4 on Thursday, the weakest level for the front month since mid-May.
March milling wheat in Paris stood 1.00 euro or 0.5 percent lower at 205.25 euros a tonne with the setback partly reflecting an adjustment to losses in Chicago on Thursday when European markets were shut.
Dealers noted the Paris market's premium to Chicago now stood at more than $60 per tonne (March-March), compared with near parity during the summer.
The Paris market has derived support from the strong pace of European Union exports.
The U.S. Department of Agriculture is expected to issue weekly export sales data at 1330 GMT on Friday, a day later than normal after this week's holiday.
Wheat sales of 350,000 to 550,000 tonnes are expected, down from the prior week's 656,100 tonnes, according to a survey of trade estimates.
The corn market continued to focus on news from China.
China's quality watchdog confirmed it has rejected two cargoes of dried distillers grains (DDGs) from the United States after detecting the presence a genetically modified (GMO) strain not yet approved by Beijing, Xinhua News Agency reported on Friday.
CBOT March corn rose 0.1 percent to $4.26-3/4 a bushel but remained on course for a weekly loss of around 1.5 percent.
"We are seeing a bit of correction in corn today after a heavy sell-off on Thursday," a Sydney-based grains trader said. "The market is on edge as to any signs of further rejected shipments (by China)."
U.S. weekly corn sales of 550,000 to 750,000 tonnes are anticipated, down from the prior week's 827,000 tonnes.
Soybean prices were higher, supported by strong demand for U.S. supplies from both the domestic and export markets.
U.S. weekly soybean sales of 500,000 to 790,000 tonnes are forecast, up from the prior week's 415,600 tonnes.
CBOT March soybeans rose 0.3 percent to $13.09-3/4 a bushel.
(Additional reporting by Colin Packham in Sydney; Editing by Anthony Barker)