GRAINS-Soybeans hit nearly 10-month high on biofuel and trade hopes

By Tom Polansek

CHICAGO, May 14 (Reuters) - Chicago Board of Trade soybean futures set a nearly 10-month high on Wednesday as the truce in the U.S.-China tariff dispute and a proposal to extend a U.S. biofuel tax credit boosted hopes for demand.

Corn futures were mixed, while wheat rebounded from a nearly five-year low on Tuesday.

Soybeans Sv1 have advanced for five consecutive sessions in the most-active contract, supported this week by the 90-day pause in sky-high tariffs that Washington and Beijing had imposed on each other's goods.

Traders watched for signs that China may buy U.S. crops as part of trade negotiations. However, they remain uncertain about what will happen when the pause expires just before farmers harvest soy and corn crops.

U.S. soybean exports may drop 20% and the prices paid to farmers will plunge without a resolution to the trade dispute, consultancy AgResource said.

China, the world's biggest soybean importer, previously did not fulfil commitments to buy American agricultural products under a Phase One trade deal with Trump during his first term.

"The trade is hopeful that China will be willing to return to the 2020 Phase One agreement," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.

Most-active CBOT soybeans Sv1 were up 4-1/2 cents at $10.77 per bushel by noon CDT (1700 GMT). The contract earlier touched its highest since late July at $10.82.

U.S. House lawmakers unveiled a proposal on Monday to extend the clean fuel tax credit 45Z until December 31, 2031, which could sustain demand for soyoil as a feedstock for the expanding renewable diesel industry.

The extension would avert a potential "demand cliff" following the 2027 expiration of the current credit, said Andrew Whitelaw, agricultural consultant at Episode 3.

CBOT wheat futures Wv1 advanced 5-3/4 cents to $5.23 per bushel.

Scouts on the first day of a crop tour through Kansas on Tuesday projected a higher wheat yield than last year in the north.

CBOT corn Cv1 rose 3 cents to $4.45-1/2 per bushel, close to a 2025 low set on Tuesday. Brisk U.S. plantings and a favourable Brazilian harvest hung over the market, analysts said.