* Soybeans up 0.8% for the week
* Wheat down after sharp gains
* Market still assessing impact of Iranian commander killing
(Adds prices in paragraphs 3, 4) SINGAPORE/PARIS, Jan 3 (Reuters) - Chicago soybean futures ticked lower on Friday although the market was poised for a fifth consecutive weekly gain, underpinned by expectations of higher Chinese demand. Wheat retreated as traders booked profit after a sharp rise in recent weeks on declining conditions of the U.S. winter crop. The Chicago Board of Trade's most-active soybean contract was down 0.8% at $9.49 a bushel by 1216 GMT, but for the week the market was up 0.8%. Wheat was down 0.9% at $5.55 a bushel, now virtually stable on the previous week, and corn was down 0.5% at $3.91-1/2 a bushel, up around 0.5% this week. The impact of a U.S. air strike in Iraq that killed a top Iranian commander, sharply escalating geopolitical tensions in the Middle East, was still to be assessed, traders said.
They could support oilseed markets after a surge in oil prices but at the same time may hurt grain demand from importing countries in the region. China has eased customs regulations on imports of soybeans through some northern border checkpoints, the commerce ministry said, a move that could smooth the way for shipments from neighbors such as Kazakhstan, Russia and perhaps Ukraine.
Condition ratings for winter wheat declined from late November to late December in most U.S. Plains states, the U.S. Department of Agriculture (USDA) said on Thursday, reflecting dry conditions in some areas. The USDA issued its last national winter wheat ratings of the season on Nov. 25, reporting 52% of the U.S. crop in good to excellent condition as of Nov. 24. Over the winter, USDA's National Agricultural Statistics Service releases monthly reports for select states. Traders are waiting for the agency to issue crop production data on Jan. 10 amid uncertainty about the size of the autumn corn harvest, which was delayed by cold, wet weather.
The USDA said in a separate report that 5.24 million tonnes, or 175 million bushels, of U.S. soybeans were crushed in November. This was below analysts' expectations for 5.277 million short tonnes, or 175.9 million bushels. The agency on Friday is due to report weekly export sales of grains and soybeans, a day later than usual due to the New Year's Day holiday on Wednesday. Commodity funds were net buyers of Chicago Board of Trade corn, wheat, soybean, soymeal and soyoil futures contracts on Thursday, traders said.
Prices at 1206 GMT
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne
(Reporting by Naveen Thukral and Sybille de La Hamaide; Editing