GRAINS-Soybeans rise on weaker dollar; tariff threats priced in

By Heather Schlitz

CHICAGO, April 16 (Reuters) - Chicago soybean futures gained strength from a weaker dollar and signs that China would be open to trade negotiations with the U.S. on Wednesday, though strong supply from South America and nearly nonexistent Chinese demand for U.S. beans continued to loom over the market, analysts said.

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

The most-active soybean contract on the Chicago Board of Trade Sv1 was last up 1-1/4 cent to $10.37-1/4 per bushel as of 11:30 am CT (1630 GMT).

CBOT July corn Cv1 rose 1 cent to $4.90-1/4 a bushel and July wheat Wv1 was up 3 cents to $5.59 per bushel.

The dollar index .DXY moved 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, has imposed retaliatory tariffs on the United States that will make it expensive to import U.S. crops.

However, bearishness from the ongoing trade war has already been factored into the market, analysts said. Meanwhile, a Bloomberg report on Wednesday stating that the Chinese government would be open to trade talks has created positive market sentiment and added strength to soybean futures.

"It's raising optimism that maybe trade negotiations can start sooner rather than later," Randy Place, analyst at Hightower Report, said.

Excess rain and flooding in the U.S. Midwest has slowed corn planting and added support to corn futures.

"For corn this year with acreage expected to be higher, farmers want to get an early start so they can get all their acres in," Place said.

The rain has also drenched spring wheat in the same area, counterbalancing pressure from weather forecasts predicting much-needed rain in the coming days to the hard red winter wheat crop in the U.S. Plains.