GRAINS-Soybeans continue recovery on weaker dollar, higher Brazil prices

CANBERRA, April 9 (Reuters) - Chicago soybean futures continued their climb on Wednesday, bouncing back from four-month lows hit earlier in the week, aided by rising prices in Brazil and a softer dollar, which made U.S. agricultural goods more competitive in global markets.

Corn and wheat futures also gained ground.

FUNDAMENTALS

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.4% at $9.96-3/4 a bushel, as of 0138 GMT, recording a third consecutive daily gain. The contract slumped to $9.69-1/2 on Monday, its lowest level since December 20.

CBOT corn Cv1 was up 0.3% at $4.70-1/2 a bushel and CBOT wheat Wv1 climbed 0.3% to $5.41-1/2 a bushel.

The U.S. dollar index .DXY weakened for a second day. FRX/

All three CBOT contracts were hit by the unleashing last week of a tit-for-tat tariff war between the United States and China, but soybeans were the hardest hit.

China is the world's biggest soy importer and the U.S. is a major supplier.

Beijing's willingness to retaliate against U.S. tariffs has led to fears of weaker demand for U.S. soybeans and pushed up the soybean basis in Brazil, a rival supplier, StoneX analyst Bevan Everett wrote in a note.

"That has brought the U.S. back to competitiveness," he said. "Other unaffected destinations are finding U.S. values cheaper than Brazil for April shipment."

Also supporting Chicago soybeans - and corn - was the prospect of increased demand for U.S. biofuel feedstock, following a recommendation from an industry coalition to sharply raise federal mandates for biomass diesel blending in 2026.

Traders were meanwhile positioning themselves ahead of a U.S. Department of Agriculture supply-and-demand report due for release on Thursday.

In other crops, a strong hailstorm hit Russia's third-largest wheat-producing region of Stavropol, damaging grain crops, a local governor said on Tuesday.

Commodity funds were net buyers of CBOT corn and soybeans on Tuesday and net even in wheat, traders said.

MARKETS NEWS

Major stock indexes fell on Tuesday as the trade war between the United States and China intensified, while oil prices and the U.S. dollar also eased. MKTS/GLOB