GRAINS-Corn and soybeans pause after rally on tariff relief

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, March 7 (Reuters) - Chicago corn and soybeans edged down on Friday, pausing after a two-day rally fuelled by U.S. tariff exemptions, with traders monitoring the next trade policy steps and awaiting U.S. jobs data.

Wheat fell more sharply, with additional pressure from expectations of a bumper harvest in top consumer China.

On Thursday, U.S. President Donald Trump suspended the tariffs he imposed this week on most goods from Canada and Mexico, the latest twist in a fluctuating trade policy.

Trump imposed 25% tariffs on imports from Mexico and Canada on Tuesday and fresh duties on Chinese goods, fuelling worries that an expanding trade war would threaten demand for U.S. agricultural exports.

Mexico was the largest buyer of American corn and wheat in 2024 and the No. 2 destination for U.S. soybeans after China.

"There has been some recovery in prices after the announcement on Mexico and Canada, but we still have China tariffs to deal with," said one trader in Singapore at an international trading company.

China bought 13.61 million metric tons of soybeans in January and February, up 4.4% from the year-earlier period, according to customs data issued on Friday.

But traders expect flows to slow in March after some buyers brought forward shipments in anticipation of tit-for-tat tariffs. China on Tuesday responded to the latest U.S. levies with tariffs on a range of U.S. farm goods including soybeans.

The most active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was 0.2% down at $10.25-1/4 a bushel by 1228 GMT. CBOT corn Cv1 was 0.3% lower at $4.62-3/4 a bushel and CBOT wheat Wv1 1.5% down at $5.45-1/2 a bushel.

All three crops had risen on Wednesday and Thursday in a rebound from multi-month lows on Tuesday.

A falling dollar =USD has also helped underpin Chicago prices, making U.S. grains cheaper overseas.

Investors are watching for monthly U.S. jobs data on Friday as a gauge of economic conditions after the tariff-focused start of Trump's second term. MKTS/GLOB

Grain markets are also looking ahead to the U.S. Department of Agriculture's (USDA) next monthly supply/demand report on March 11.

The report will consider trade policies in place when the forecasts for grains and soybeans are issued, an agency official said on Thursday.

China is expecting to produce an abundant wheat harvest this year, a COFCO International executive said, with rising domestic supplies likely to reduce the need for imports.

Coupled with a sharp upward revision to Australia's estimated crop, the outlook has tempered concerns about mixed growing conditions for northern hemisphere wheat.