GRAINS-Chicago soybeans set for first weekly gain in three on demand prospects

BEIJING, May 16 (Reuters) - Chicago soybean futures are set for a weekly gain on Friday after two straight weeks of decline, as a China-U.S. tariff pause sparked hopes for increased Chinese demand, although uncertainty over the shape of a final trade deal lingered.

Soybean contract Sv1 rose 0.24% to $10.54 a bushel, as of 0336 GMT on Friday. Prices are up 0.14% for the week.

Prices had been under pressure following a sharp drop in soyoil during the previous session caused by concerns over U.S. biofuel targets and lower crude oil prices.

Soybeans rebounded after the U.S. Environmental Protection Agency (EPA) sent its proposal to the White House for review on future biofuel blending mandates starting in 2026.

"There are expectations that this will be positive for soy, as a way to assist producers impacted by Trump tariffs," said Andrew Whitelaw, agricultural consultant at Episode 3.

Wheat Wv1 is set for its first weekly gain in four weeks, as low prices continue to attract buying interest.

U.S. export sales of wheat for the week ended May 8 totalled 804,800 metric tons, at the higher end of analyst expectations, according to the U.S. Department of Agriculture.

Saudi Arabia issued a tender to buy 655,000 metric tons of wheat for August-October shipment period, the General Food Security Authority said on Thursday.

Corn Cv1 gained 0.28% to $4.49-6/8 a bushel and is on track for a weekly gain after declining for three, supported by robust demand and favourable weather.

Weekly export sales of corn totalled 2,186,100 metric tons for the week ended May 8, above a range of analysts' expectations, according to USDA.

Meanwhile, Brazil's second-corn farmers are poised to increase production by 11% this year to an estimated 99.8 million metric tons, national crop agency Conab said on Thursday, citing good weather in key growing regions.

Commodity funds were net sellers of Chicago Board of Trade soybean, soyoil, soymeal and corn futures contracts on Thursday, traders said. They were net buyers of wheat futures, traders said. COMFUND/CBT