GRAINS-US soy hits four-month high on hopes for China trade deal

By Tom Polansek

CHICAGO, Oct 27 (Reuters) - U.S. soybean futures jumped to their highest level in more than four months on Monday on hopes China will resume buying American supplies after President Donald Trump said he hoped to reach a trade deal with Beijing during his visit to Asia this week.

China, the world's biggest soy importer, has shunned soybeans from the autumn U.S. harvest and shifted its demand to South American suppliers due to the trade conflict with Washington.

The dispute has robbed U.S. soy farmers of their largest market, hurting crop prices at a time when they are facing high costs for inputs such as fertilizer.

Trump said on Monday the U.S. and China were set to "come away with" a trade deal. He was expected to meet Chinese President Xi Jinping on Thursday in South Korea after officials from both countries talked this weekend in Kuala Lumpur.

"I think most people feel now that they're going to get something done with China," said Jim Gerlach, president of commodities brokerage A/C Trading in Indiana.

At the Chicago Board of Trade, the most active soybean futures Sv1 were up 28-1/4 cents to $10.70 per bushel by 12 p.m. CDT (1700 GMT) and touched their highest price since June 20.

Buying spilled over into the corn and wheat markets, traders said. Corn Cv1 rose 7-1/4 cents to $4.30-1/2 a bushel and hit its highest price since July 3. CBOT wheat Wv1 advanced 17 cents to $5.29-1/2 a bushel and reached its highest price since September 18.

The markets need details on any U.S.-China trade deal, said Matt Ammermann, commodity risk manager at StoneX.

"Currently fear and hype are the main trading factors," he said.

U.S. Treasury Secretary Scott Bessent on Sunday said U.S. and Chinese officials agreed a framework trade deal and he anticipates China will revive substantial purchases of U.S. soybeans.

"Talk is China continues to book Brazilian soybean cargos for December-March shipment," Ammermann said. "But it appears China still has 5-8 million tons of required soybean purchases to bridge the gap to Brazil's new crop, so China still has a supply requirement which could be transferred to the U.S."