GRAINS-Soybean, corn futures hit 1-month highs as crude oil soars

By Julie Ingwersen

CHICAGO, Oct 23 (Reuters) - U.S. soybean and corn futures rose on Thursday to one-month highs, spurred by a jump in crude oil <CLc1> following U.S. sanctions on Russia's two biggest oil firms along with hopes for progress in U.S.-Chinese trade talks.

Wheat futures climbed more than 1%, supported by firming domestic cash markets and possible fund short-covering, analysts said.

As of 12:50 p.m. CDT (1750 GMT), Chicago Board of Trade November soybeans SX25 were up 8 cents at $10.42-3/4 per bushel after reaching $10.43-1/2, the contract's highest since September 19.

CBOT December corn CZ25 was up 5 cents at $4.28 a bushel while December wheat WZ25 was up 8-1/2 cents at $5.12-1/4 a bushel.

Crude oil surged 5% after the U.S. imposed sanctions on major Russian suppliers Rosneft and Lukoil over the Ukraine war. Soybeans and corn sometimes follow oil prices as the crops are widely processed for use in biofuel. O/R

CBOT December soyoil futures BOZ25 were up 0.83 cent, or 1.66%, at 50.90 cents per pound.

The soybean market also found support from prospects for a U.S.-China trade deal after their standoff this year halted massive U.S. soybean sales to China.

U.S. President Donald Trump maintained an upbeat tone about reaching agreements with his Chinese counterpart Xi Jinping when they are due to meet in South Korea next week, reiterating that the resumption of soybean purchases is a key area of discussion.

Some analysts noted brisk demand for soy from buyers other than China as well as domestic soy processors.

"The cash markets are really strong, not only in the interior (Midwest) but also for export. ... We are the cheapest origin versus Brazil," said Tom Fritz, a partner with EFG Group in Chicago.

Similarly, corn futures found support from cash-market strength. Cash basis bids for corn have firmed at a few locations this week, reflecting a lack of farmer selling and uncertainty about the size of the crop, given anecdotal reports from farmers of underwhelming yields, Fritz said.

"We've got a fairly decent (corn) export market and a great domestic market. And the chatter continues about 'how small is the yield,'" Fritz said.

The U.S. Department of Agriculture has not released updated U.S. production estimates since mid-September due to the ongoing government shutdown.