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