Chicago soybeans fall, grains choppy as markets recover from sell-off

* Weekly U.S. crop data supports good harvest outlook

* Dollar rebounds as financial markets steady after sell-off

* Soybeans fall on low demand

CHICAGO, Aug 6 (Reuters) - Chicago soybeans slumped on low demand on Tuesday as financial markets recovered from an epic sell-off on Monday.

Meanwhile, corn and wheat bounced around as the dollar strengthened and traders began positioning themselves ahead of next week's U.S. Department of Agriculture supply and demand report.

The most active soybean contract on the Chicago Board of Trade (CBOT) was down 12-1/2 cents at $10.28-1/2 a bushel at 12:12 p.m. CDT (1712 GMT), halting a two-session bounce.

CBOT corn fell 1/2 cent to $4.06-1/2 a bushel and CBOT wheat rose 3-1/2 cents to $5.43 a bushel.

Low global oilseed demand weighed on soybean prices, according to Karl Setzer, co-founder of Consus Ag Consulting.

China is buying little and not sourcing much from the U.S., said Setzer. He said less than a third of Chinese soybean demand is coming to the U.S. despite competitive prices.

"That tells us that our demand just isn't there right now."

Corn and wheat swung back and forth after largely holding up during Monday's sell-off in other markets, as funds covered already large short positions and an export-friendly drop in the dollar lent support, traders said.

But on Tuesday, a firming dollar made U.S. exports less competitive, and the focus shifted to the USDA's monthly supply and demand report, to be released Aug. 12.

"Trade is getting a little anxious," Setzer said, with some analysts predicting a reduction in acres and others seeing yields remaining high.

"We're just seeing that fight back and forth a little bit," he said.

Also adding pressure was the USDA's weekly crop progress and condition report on Monday, which showed the rating for the U.S. soybean crop had improved unexpectedly while corn conditions fell slightly, in line with market estimates. The scores for both crops remained at their highest for the time of year since 2020. (Reporting by Renee Hickman in Chicago; Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Mark Potter)