(Recasts, adds quotes, updates prices with U.S. market close)

By Karl Plume

CHICAGO (Reuters) - U.S. soybean futures rose morethan 1 percent to a near-three-week high on Tuesday as soybean oilfutures rallied more than 2 percent on large soyoil sales to Chinawhich suggested stronger demand for the oilseed.

Wheat futures weakened as an upward revision to Russian grainstocks, a firmer dollar and weaker outside markets fueledprofit-taking following Friday's rise to a three-week high.

Corn rose to a 23-month peak early but ended little changed asinvestors booked profits ahead of a monthly government crop reportdue later this week.

"Our leader today is soybean oil," said analyst Bill Nelsonwith Doane Advisory Services.

"When you tie soybean oil with China in the same sentence,buying from us, that's good for overall soybean demand -- to beable to find an outlet for (what is) typically your marginalproduct," he said.

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Reuters Insider: Sell corn on rallies, cautiously buy soy:

http://link.reuters.com/gad99n

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The U.S. Agriculture Department said Tuesday that privateexporters reported U.S. soyoil sales totaling 90,500 tonnes toChina, Peru and an undisclosed destination.

A trade spat between China, the world's top soyoil importer,and Argentina, the top exporter, has diverted more demand to theUnited States.

U.S. exports have also benefited from slower soyoil exportsfrom Brazil, which is using more of its domestically producedsupply for the production of biofuel.

Spot soybean futures on the Chicago Board of Tradesettled up 14 cents, or 1.4 percent, at $10.43-3/4 per bushel, thehighest close since Aug. 17. New-crop November soybeansended up 17 cents, or 1.6 percent, at $10.52 a bushel.

WHEAT, CORN WEAK

Wheat and corn struggled to follow the rally in soybeans as anupward revision to Russian grain stocks, a firmer dollar and weakoutside markets fueled profit-taking which pulled markets fromrecent peaks.

Traders were also cautious ahead of Friday's monthly USDA cropreport, which was expected to show a downward revision in U.S.corn output and may show another decline in world wheatproduction.

"It was overdone Friday and the outside markets are weak soit's setting back," said Paul Haugens, vice president for NewedgeUSA.

Russia's agriculture minister was quoted by the Interfaxagency as saying grain stocks had been revised up to 26 milliontonnes from 21.7 million and that Russia had enough grain to feeditself.

President Dmitry Medvedev signaled on Monday that a ban ongrain exports could be lifted earlier than Dec. 31 this year, butthe Kremlin later clarified the statement to say that the ban willremain in place until the 2011 harvest, not the 2010 harvest.

Questions also emerged about grain exports from another majorBlack Sea region supplier as traders in Ukraine said the country'scustoms service is holding a month's supply of grain at portswithout official explanations.

CBOT September wheat fell to $7.02-1/2 a bushel and themore active December contract dropped to $7.35-1/4, bothdown 0.8 percent.

CBOT September corn rose 1-3/4 cents to $4.51-1/2 perbushel while December gained 1-3/4 cents to $4.66-1/4.

(Additional reporting by Naveen Thukral in Singapore, Gus Trompizin Paris, Sam Nelson and Julie Ingwersen in Chicago; editing bySofina Mirza-Reid)