GRAINS-CBOT corn, soy rally as Trump postpones threatened tariffs

Updates with US trading

By Renee Hickman

CHICAGO, Jan 21 (Reuters) - Chicago Board of Trade corn futures hit a fresh one-year high on Tuesday, as the tariffs promised by newly sworn-in U.S. President Donald Trump did not materialize, traders said.

Soybean futures also turned sharply higher, as concerns about weather in South America and Brazil's sluggish harvest pace supported both soy and corn markets.

The most-active CBOT corn contract Cv1 was up 4-3/4 cents to $4.89 a bushel at 12:15 p.m. CST (1815 GMT), after hitting its highest point since Dec. 8, 2023.

CBOT wheat futures Wv1 followed corn higher and were up 20-1/4 cents at $5.59 a bushel, its highest since Dec. 13. Soybeans Sv1 were up 25-3/4 cents at $10.59-3/4 a bushel.

A rebound in Brazil's soybean basis, as the harvest of its new crop inventory remains historically low, also gave soy futures a boost, said Karl Setzer, partner at Consus Ag Consulting.

But traders said much of Tuesday's rally in soy and grains was because Trump did not immediately impose tariffs on imports from multiple counties after taking office on Monday, although he said he was considering imposing 25% duties on imports from Canada and Mexico as of Feb. 1.

Meanwhile, showers in Argentina failed to alleviate concerns that the ongoing drought could further harm crop yields, said Michael Cordonnier, owner of Soybean and Corn Advisor.

"Argentina has gotten some rain, but they need a lot more," he said.

Cordonnier said Brazil is experiencing the opposite problem, as excessive rains in top grain-producing state Mato Grosso have resulted in the slowest soybean harvest pace in years.

Weather-related soybean crop quality issues could also become a problem in the coming weeks if the rainfall in Brazil continues, Cordonnier said. That, in turn, could affect Chinese demand for South American soy, market analysts said.

(Reporting by Renee Hickman in Chicago, additional reporting by Mei Mei Chu and Sybille de La Hamaide; Editing by Rod Nickel)

((renee.hickman@thomsonreuters.com))