GRAINS-Chicago soybeans choppy amid US-China trade optimism

By Heather Schlitz

CHICAGO, May 7 (Reuters) - Chicago soybean, corn and wheat futures chopped up and down on Wednesday as signs of a thaw in the trade standoff between China and the U.S. added support to agricultural markets, though concerns about demand and global competition continued to loom over the market, traders said.

A planned meeting between senior U.S. and Chinese officials boosted hopes for easing tensions between the world's two largest economies, though market players have reacted with only cautious optimism.

The planned meeting, which comes after the recent absence of clear steps towards de-escalating the tariff standoff, also added underlying support to corn and wheat prices that have been pressured by improving crop weather in the United States.

"There's a better tone now," Darin Fessler, hedge advisor at Lakefront Futures and Options, said.

The soybean market has been particularly sensitive to the Sino-U.S. tariff battle, given China dominates global soybean imports, including a large portion of shipments from the United States, the world's second-largest exporter of the oilseed.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was unchanged at $10.41-1/4 a bushel as of 1650 GMT.

CBOT corn Cv1 fell 4-1/4 cents to $4.51-1/4 per bushel, hitting its lowest point since April 4. CBOT wheat Wv1 lost 1/2 cent to $5.35-1/2 a bushel.

Despite good demand for U.S. corn, favorable planting weather in the U.S. Midwest and the upcoming Brazilian corn harvest have pressured prices.

The wheat market has drawn support from dryness concerns in Henan, a major wheat-producing province in China. Reduced output there could spur more Chinese demand for wheat imports, but good weather in the U.S. wheat belt has put a lid on prices.

Investors are also awaiting further direction from a U.S. Federal Reserve policy decision later on Wednesday.