GRAINS-Soybeans up from two-week low on U.S.-China trade hopes

* Soybeans hit two-week low of $9.19-1/2 a bushel on Friday

U.S. and China could seal limited trade agreement

* Wheat and corn fall on slow U.S. exports (Updates with European trade, adds comment, changes dateline)

By Colin Packham and Michael Hogan

SYDNEY/HAMBURG, Oct 28 (Reuters) - U.S. soybean futures rose on Monday, recovering from a two-week low touched on Friday, on hopes for progress in trade talks between Washington and Beijing to settle a conflict that has heavily reduced U.S. agricultural exports to China.

Corn and wheat were weakened by expectations that a U.S Department of Agriculture (USDA) report later on Monday could give a positive picture of U.S crop conditions and harvest progress.

The Chicago Board of Trade's most active soybean contract was up 0.3% at $9.23-1/2 a bushel by 1055 GMT, having fallen more than 1% on Friday and touched a two-week low of $9.19-1/2 a bushel.

"The market has been buoyed by the prospects of a first-stage U.S.-China trade deal," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. "The first-stage deal will be to the benefit of U.S. beans."

U.S. and Chinese officials are "close to finalising" some parts of a trade agreement after high-level telephone discussions on Friday, the U.S. Trade Representative's office and China's Commerce Ministry said, with talks to continue.

Markets are rather hardened to news about possible progress in the U.S.-China trade war and want concrete details after so many months of speculation, so the rise in soybeans is pretty moderate so far today, one European trader said.

Dealers were watching forecasts of generally dry weather across key U.S. grain belts, which could help with the harvest.

Markets were awaiting the weekly crop progress report from the USDA on Monday, expecting news of good progress with U.S. corn and soybean harvests.

An outlook for favourable weather across key producing areas holds gains in check and allows farmers a chance to rapidly advance harvesting, brokerage Allendale said in a note.

Corn was down 0.4% at $3.85 a bushel, having closed unchanged on Friday. Wheat fell 0.9% to $5.12-3/4 a bushel, having closed in positive territory on Friday.

Wheat and corn both fell partly on concern about sluggish U.S. exports, said Matt Ammermann, commodity risk manager at INTL FCStone.

Russian wheat prices have been firm recently, which is positive for other rival exporters like the U.S., but are we now getting to a point that EU wheat can compete easier, especially if the euro weakens, he said.

For corn, its hard to ignore the slow pace of U.S. exports. With no fresh change in demand this likely to continue for some time unless there is a breakthrough on trade talks with China.

Analysts also noted uncertainty surrounding any potential change to Argentina's grain and soybean export tax policy after the election of Alberto Fernandez as the country's next president. (Reporting by Colin Packham and Michael Hogan Editing by David Goodman)