GRAINS-Soybeans below seven-week highs on ample South American supply, tariffs

CANBERRA/PARIS, April 16 (Reuters) - Chicago soybean futures were nearly flat on Wednesday but down from Monday's seven-week highs in response to strong supply from South America plus the impact of tariffs on Chinese demand for U.S. beans.

Corn and wheat futures rose, supported by a renewed weakening of the U.S. dollar making U.S. exports more competitive.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.05% at $10.36-1/2 a bushel at 1200 GMT after moving as high as $10.49-1/2 on Monday.

CBOT July corn Cv1 rose 0.3% to $4.90-3/4 a bushel and July wheat Wv1 was up 0.7% at $5.60 a bushel.

The dollar index .DXY was down 0.6%, reversing some of Tuesday's gains and moving back towards three-year lows reached after U.S. President Donald Trump announced his tariff policies. USD/ MKTS/GLOB

China, by far the biggest buyer of U.S. soybeans and also a buyer of U.S. corn and wheat, has imposed tariffs on the United States that will make it expensive to import U.S. crops.

"The U.S. will have to make a deal with China or it will end up having to store a lot of unsold soybeans," said Ole Houe, director of advisory services at IKON Commodities in Sydney.

A big soybean surplus would fill U.S. storage facilities and leave little space during harvest later this year for other crops like corn, which would have to be sold more quickly, likely at lower prices, Houe said.

Meanwhile, the U.S. national soybean crush in March fell below most trade estimates, the average daily processing pace declining for a third straight month, industry data showed.

Brazil is wrapping up a massive soybean harvest, and traders think efforts by the Argentinian government to stimulate exports could result in larger soy shipments from the country.

In other crops, wheat is under pressure from weather forecasts predicting much-needed rain in the coming days in the U.S. Plains.

Argentina's 2025/26 wheat harvest is set to grow by 10.2% to 20.5 million metric tons this year, the head of economic studies at the Buenos Aires grains exchange said.

India is likely to see above-average monsoon rains for the second straight year in 2025, the government said, raising expectations of higher farm output.

Meanwhile French farm office FranceAgriMer on Wednesday lowered its forecast of French soft wheat exports outside the European Union in 2024/25 to 3.1 million metric tons from 3.2 million projected last month, 70% below last season's level.