GRAINS-Soybeans climb to two-month high; US-China trade war in focus

By Naveen Thukral

SINGAPORE, April 21 (Reuters) - Soybeans climbed to a two-month high on Monday and corn inched higher, supported by expectations of trade talks between Washington and Beijing, although gains were limited as market participants remained cautious.

Wheat prices eased, but losses were limited by concerns over dryness curbing U.S. yields.

"There is some hope that U.S. and China might start trade negotiations, but the price move is limited for now," said one grains trader in Singapore.

"There is not going to be much excitement unless we some action on trade talks."

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.3% at $10.50-1/2 a bushel as of 0244 GMT. Earlier in the session, the contract rose to $10.55 a bushel, its highest level since February 24.

Corn Cv1 gained 0.6% at $4.85 a bushel and wheat Wv1 was down 0.3% at $5.60-3/4 a bushel, after rallying in the previous two sessions.

Dealers await news about the possible trade talks in hopes that they could restart U.S. soybean exports to China.

Xie Feng, China's ambassador to the United States, has urged Washington to seek common ground with Beijing and pursue peaceful coexistence while warning that China stood ready to retaliate in the escalating trade war.

While Japan, Taiwan and others are already in talks or preparing to negotiate over U.S. President Donald Trump's so-called "Liberation Day" tariffs, there is currently no high-level dialogue planned with China.

Trump said on Friday that the U.S. is having good conversations privately with China amid the two countries' trade war.

In the wheat market, U.S. dryness triggered worries over crop losses. The U.S. Department of Agriculture reported last week winter wheat conditions at 47% good-to-excellent, with 34% of the U.S. wheat crop affected by drought as of Tuesday.

While swathes of the U.S. Plains are likely to remain too dry, heavy rain over the U.S. corn belt has delayed seeding and boosted prices.

Large speculators trimmed their net short position in CBOT corn futures in the week to April 15, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and switched to a net long position in soybeans.