Chicago soybeans edged higher on Thursday on expectations for a rebound in Chinese demand, adding to a big full-year gain, while wheat extended its fall to a new six-month low.

Corn was down slightly after closing 1.6 percent lower in the previous session in light holiday-season trade.

"You're looking at a market that's rangebound, with light volume," said Dax Wedemeyer, broker and analyst at Iowa-based U.S. Commodities. "Technically, I think you can see if (buyers) step in on these lows. Everything is pretty heavily oversold."

Overall, fundamental conditions of supply and demand are becoming more bullish amid unfavorable dry weather for winter wheat in the southern U.S. Plains and recent soybean purchases by China, Mike Zuzolo, president of Global Commodity Analytics, said in a note to clients.

Soybeans are on pace for a full-year gain of 19 percent due to the Midwest drought, putting it atop a pack of 19 components of the commodities benchmark Reuters Jefferies CRB Index . But soy's increase has shrunk considerably during the current quarter, which is on pace for the biggest loss in more than three years.

Investors also kept a wary eye on U.S. President Barack Obama's return to Washington to restart negotiations over the federal budget. U.S. equities opened lower, and crude oil eased, while the U.S. dollar was slightly lower in early dealings.

With the U.S. "fiscal cliff" of spending cuts and tax increases in mind, large speculators have slashed their bullish bets on corn to the smallest level since June and boosted their net short position in Chicago wheat to the highest since May, data from the U.S. Commodity Futures Trading Commission showed last week.

Chicago Board Of Trade March soybeans added 5-1/4 cents, or 0.4 percent, to $14.29-3/4 a bushel as of 9:35 a.m. CST (1535 GMT). March corn shed 1 cent to $6.92-1/4 a bushel.

The USDA on Wednesday confirmed sales of 115,000 tonnes of U.S. soybeans to China and 108,000 tonnes to unknown destinations, both for delivery in 2012/13.

"We are pretty bullish on beans for the first quarter next year as crush margins improve in China and the U.S. balance sheet tightens," said Victor Thianpiriya, an agricultural strategist at ANZ in Singapore. "But the technical picture is pretty weak, so you could see some better entry points."

The U.S. Department of Agriculture on Wednesday reported weekly export inspections of U.S. soybeans at 44.486 million bushels, above a range of trade estimates for 37 million to 42 million. USDA showed corn export inspections at 13.475 million bushels, within the range of estimates for 9 million to 14 million.

The soybean market has been weighed down in recent weeks by forecasts for record production in South America, where crops are experiencing largely favourable weather.

The wet areas of Argentina were expected to turn drier in the next two weeks, easing concerns about excess moisture, while welcome rains were forecast later this week and next week for parts of central Brazil.

March wheat was 4-3/4 cents, or 0.6 percent, lower at $7.69-3/4 a bushel, after dropping to $7.66 earlier, the lowest price since early July.

"Now you're looking to see if you can get to some (prices) where U.S. wheat will look more enticing," Wedemeyer said.

Support for March wheat looked to be around $7.65, he said.

The USDA reported the amount of wheat inspected for export in the latest week at 15.128 million bushels, within a range of trade estimates for 12 million to 17 million.

U.S. soft red winter wheat, the type traded at the CBOT, has become the cheapest milling wheat in the world. An absence of fresh export sales has kept a lid on futures prices.

Traders were monitoring crop weather in the southern U.S. Plains hard red winter wheat region, where cold temperatures this week raised the threat of crop damage from winterkill.