(New throughout; updates prices, adds quotes, changes byline, changes dateline from previous PARIS/SINGAPORE)

CHICAGO, Jan 26 (Reuters) -

U.S. soybean futures sank to a one-week low on Friday and corn fell more than 1% as traders focused on improving prospects for South American harvests, analysts said.

Wheat fell about 2% on profit-taking and cooling global export trade.

As of 12:53 p.m. CST (1853 GMT), Chicago Board of Trade March soybeans were down 13 cents at $12.10 per bushel after dipping to $12.08-1/2, the contract's lowest since Jan. 18.

CBOT March corn was down 5-3/4 cents at $4.46 a bushel and March wheat was down 13 cents at $5.99-1/4 a bushel.

Outlooks for large soy and corn crops in Argentina and optimism about Brazil's harvest set the tone. The Buenos Aires Grains Exchange on Thursday

raised its estimate

of Argentina's soybean crop to 52.5 million metric tons, up about 1% from its previous forecast, and pegged the crop at 56.5 million tons, up nearly 3%.

Given weather forecasts for welcome rains in Argentina early next month after a dry spell, "I think you will see bigger increases down the road," said Mark Soderberg, a market analyst with ADM Investor Services.

Falling cash prices for Brazilian soybeans added pressure. "You are seeing big drops in soybean basis levels in Brazil as confidence in their crop grows, so that makes U.S. (soy) less competitive," Soderberg said.

CBOT wheat futures fell in a retreat after the most-active March contract rose in six of the last seven trading sessions, buoyed by technical buying and short-covering. The rally appeared to have cooled international export demand for wheat after a flurry of purchases at mid-month.

"There has been very little global trade here this week on this recent (wheat futures) price increase. So we have pulled back," Soderberg said.

Meanwhile, soil moisture has improved in the U.S. Plains and Midwest. The U.S. Department of Agriculture said 22% of the U.S. winter wheat crop was located in a drought area as of Jan. 23, a drop from 27% the previous week and 59% a year ago.

(Reporting by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore Editing by Marguerita Choy)