GRAINS-Soybean futures rise on US-China trade optimism

By Julie Ingwersen

CHICAGO, June 5 (Reuters) - Chicago Board of Trade soybean futures notched a one-week high on Thursday on optimism about the U.S. trade relationship with China, the world's largest soybean buyer, after leaders of the two countries spoke by phone for more than an hour and agreed to further discussions.

Wheat futures firmed on short-covering amid rising tensions between major grain suppliers Russia and Ukraine. Corn futures ended higher but a slowing U.S. export pace and subdued domestic cash markets capped gains in the benchmark July contract.

CBOT July soybeans SN25 settled up 6-3/4 cents at $10.51-3/4 per bushel after rising to $10.56-3/4, the contract's highest since May 28. July corn CN25 ended up 3/4 cent at $4.39-1/2 a bushel and July wheat WN25 finished up 2-1/4 cents at $5.45-1/2 a bushel.

Soybeans drew support from news that U.S. President Donald Trump and Chinese leader Xi Jinping held a rare leader-to-leader call. Trump said on social media that the talks, which focused primarily on trade, led to "a very positive conclusion," announcing further lower-level U.S.-China discussions.

"The two leaders finally got together. The trade is hoping it will give us some soybean business," said Tom Fritz, a partner with EFG Group in Chicago.

Others noted support from outlooks for warmer and drier weather in mid-June that could stress developing U.S. crops.

Corn futures ended higher but gains in the most-active July CN25 contract, representing last year's U.S. harvest, trailed those in the December contract, which reflects the 2025 U.S. harvest.

Some brokers said demand for "old-crop" U.S. corn is cooling, with the harvest of Brazil's big second-season corn crop about to begin. The U.S. Department of Agriculture reported weekly export sales of U.S. old-crop corn in the latest week at 942,300 metric tons, in line with trade expectations but down 31% from the prior four-week average.

Domestically, demand for corn in the cash market from livestock feeders and processors has been steady but subdued, allowing the July futures contract to erase its premium and trade at a discount to new-crop December futures.

"It just means that there is a comfort level by the end-user that they don't need to be buying bushels aggressively right now," said Ted Seifried, vice president of Zaner Group.

Wheat futures firmed as traders eyed developments in the Black Sea region, where Ukraine has stepped up attacks on Russian targets. Russia will respond to Ukraine's latest attacks as and when its military sees fit, the Kremlin said on Thursday, escalating worries over grain supplies.