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GRAINS-Soybeans rebound in technical bounce, trade aid details awaited

* Market awaiting details of USDA trade war farm aid package

* Corn underpinned by planting delays, but market overbought

* Wheat retreats on technical selling, profit-taking (Adds closing prices)

By Karl Plume

CHICAGO, May 22 (Reuters) - U.S. soybean futures rebounded on Wednesday in a technical correction from the prior session's drop as the market awaited details of a Trump administration farm aid package that could encourage farmers to plant more soybeans.

Corn ended firm, although spillover support from higher soy and worries over rain-delayed U.S. planting were largely offset by technical selling and profit-taking following seven straight sessions of gains that took prices to one-year highs.

Wheat retreated on technical selling and profit-taking after touching a three-month high on Tuesday.

Bloomberg reported on Tuesday that the White House was considering direct payments of $2 per bushel for soybeans and just 4 cents a bushel for corn to offset farmers' losses caused by the U.S.-China trade war.

The report, which was seen encouraging more soy acres at the expense of corn, knocked soy prices down 1% before the U.S. Department of Agriculture (USDA) released a statement suggesting it was inaccurate.

"Soybeans are gaining back some of what they gave up yesterday. We bounced off technical support, which was very good," said Karl Setzer, market analyst with Agrivisor.

U.S. soybean export prospects were also seen improving due to rising soybean prices in South America and better soy crush margins in China that indicate soybean demand from the world's top importer could rise, he said.

While China was not expected to buy U.S. soybeans as a result of steep tariffs, Chinese buying of South American soy could steer other world buyers to the United States.

The USDA on Wednesday confirmed private sales of 131,000 tonnes of U.S. soybeans to undisclosed buyers.

Chicago Board of Trade (CBOT) July soybean futures settled 6-1/2 cents higher at $8.28-1/2 per bushel after bouncing off the prior day's low of $8.19.

July corn was up 1/4 cent at $3.94-1/2 a bushel while CBOT July wheat fell 6 cents to $4.72-3/4 a bushel.

The heavy rain expected this week in parts of the Midwest and Plains has rattled grain markets as it could compound corn planting delays after a soggy spring while also threatening to damage winter wheat in the run-up to harvesting.

The U.S. Department of Agriculture said on Monday that a lower-than-expected 49% of the U.S. corn crop has been planted, the slowest pace on record, based on data going back to 1980. Soybeans were 19% planted, also short of market expectations. (Reporting by Karl Plume Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; editing by James Dalgleish and Leslie Adler)

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