GRAINS-Soybeans edge up as market digests Chinese tariff threat

* Soybeans steady after Wednesday slide on China tariff plan

* Investors doubt China to shun U.S. soy, hope for trade talks

* Wheat firms as concerns about U.S. winter crop persist

(Updates with European trading, changes byline/dateline) PARIS/SYDNEY, April 5 (Reuters) - Chicago soybean futures edged higher on Thursday as investors played down the immediate impact of proposed Chinese tariffs on U.S. supplies, a move that had sent prices plunging a day earlier. Soybean futures dropped as much as 5 percent on Wednesday following Beijing's announcement of potential retaliatory levies on U.S. goods including soybeans, the most valuable U.S. farm export to China. After trimming losses by Wednesday's close, soybeans inched upwards on Thursday as traders doubted whether China could shun U.S. soybeans given its huge import requirements, while investors more widely saw signs the two sides may choose to negotiate. China is the world's top importer of soybeans. The United States is its second-largest supplier behind Brazil, but seasonal differences mean that U.S. shipments tend to ebb at this time of year while Brazil and Argentina ramp up exports after their harvests. "At second glance ... it becomes clear that U.S. soybeans are exported to China predominantly between October and March - that is to say during and shortly after the U.S. harvest so most of the soybeans should already have been shipped by now," Commerzbank analysts said in a note. "The drought-related crop outages in Argentina could make it harder for China to completely do without U.S. soybeans in the next few months," they added. The most-active soybean contract on the Chicago Board of Trade was up 0.5 percent at $10.20-1/4 a bushel by 1206 GMT. It closed 2.2 percent down on Wednesday after hitting lowest in almost two months at $9.83-1/2. However, the uncertainty created by the Chinese-U.S. trade row could still weigh on U.S. prices, some analysts said. "It is going to mean surplus soybeans, and lower soybean prices in the U.S.," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. CBOT corn futures rose 0.5 percent to $3.82-3/4 a bushel, having slumped 1.9 percent in the previous session. Corn was also listed among the U.S. products to be subject to the Chinese levies, though the feed grain represents much smaller trade flows than soybeans. CBOT wheat climbed 0.9 percent to $4.59-3/4 a bushel, supported by continuing concern over crop conditions in dry parts of the U.S. Plains. The U.S. Department of Agriculture said on Monday that only 32 percent of the U.S. winter wheat crop was in good to excellent condition, the lowest rating for this point in the crop year since 2002.

Prices at 1206 GMT

Last Change Pct End Ytd Pct Move 2017 Move CBOT wheat 459.75 4.00 0.88 427.00 7.67 CBOT corn 382.75 1.75 0.46 350.75 9.12 CBOT soy 1020.25 5.00 0.49 961.75 6.08 Paris wheat May 166.75 0.50 0.30 162.50 2.62 Paris maize Jun 165.50 0.00 0.00 163.50 1.22 Paris rape May 351.75 1.00 0.29 352.75 -0.28 WTI crude oil 63.19 -0.18 -0.28 60.42 4.58 Euro/dlr 1.23 0.00 -0.13

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Colin Packham in Sydney and Gus Trompiz in Paris Editing by Manolo Serapio Jr. and David Evans)