Soybeans trim back on improved U.S. crop conditions

* USDA surprises with improved soybean crop rating

* USDA reports corn condition better than forecast

* Wheat gains on weaker U.S. currency

CHICAGO, July 21 (Reuters) - Chicago soybean futures fell on Tuesday, despite renewed exports to China, after the U.S. Agriculture Department issued better-than-expected weekly crop ratings.

Corn also eased on better-than-expected crop conditions and favorable U.S. weather as traders eyed record yield potential this fall.

The Chicago Board of Trade's most active soybean contract fell 6-1/2 cents to close at $8.96-1/2 per bushel.

CBOT corn was down 5-1/2 cents to close at $3.22-3/4 a bushel and wheat added 5-3/4 cents to $5.27-3/4 a bushel.

In its weekly crop report after markets closed on Monday, the U.S. Department of Agriculture rated 69% of soybeans in good-to-excellent condition, up from 68% last week. Analysts had expected 67%.

China booked 126,000 tonnes of U.S. soybeans for delivery in the 2020/21 marketing year, the USDA said on Tuesday.

"I think we’re really going to need to see some more significant Chinese purchases to push the bean market and stay above $9.00," said Chuck Shelby, president of Risk Management Commodities.

China plans to sell rice and wheat from state reserves to animal feed producers struggling with high corn prices, three sources familiar with the matter said. The sales may reduce China's need to import U.S. corn, said Arlan Suderman, chief commodities economist at StoneX.

"It doesn't mean that they won't buy U.S. corn, but maybe they'll buy less of it than they otherwise would," he said.

The USDA said 69% of U.S. corn was in good-to-excellent condition, unchanged on the week. Analysts had expected 68%.

Wheat gained off a softening U.S. dollar, which makes U.S. exports more attractive to international buyers.

"The weaker dollar has been a positive input for wheat," said Joe Vaclavik, president of Standard Grain. "Our exports, which have historically accounted for a tremendous portion of our demand, are just not what they need to be." (Reporting by Christopher Walljasper; Editing by David Gregorio)