GRAINS-Soybeans set for biggest monthly gain in nearly four years on China trade optimism

By Tom Polansek

CHICAGO, Oct 31 (Reuters) - U.S. soybean futures were on course for their biggest monthly gain in nearly four years on Friday following a rally fuelled by the prospect of revived exports to China, traders said.

Prices Sv1 remained near a 15-month high reached on Thursday after U.S. officials said China, the world's biggest soy importer, would buy tens of millions of tons of American crops in the next few years as part of a trade deal.

In the near term, U.S. Treasury Secretary Scott Bessent said China agreed to buy 12 million metric tons of U.S. soybeans through January.

"This is going to be something where we should see sales almost every other day," said Rich Nelson, chief strategist for Allendale.

Bessent said China also agreed to buy 25 million metric tons of U.S. soybeans annually for the next three years. That commitment fell short of U.S. exports to China in recent years. However, it likely exceeds what China would have bought, as it has been shifting its purchases to top-exporter Brazil, Nelson said.

"Realistically, within two years, we'd be easily under 20 million tons, if not moving into the 18 million ton timeframe," Nelson said. "Compared with where we would be, this is a positive development."

The most-active soybean contract on the Chicago Board of Trade Sv1 was up 3-3/4 cents at $11.11-1/2 a bushel as of 12:35 p.m. CDT (1735 GMT). The market was on track for its strongest monthly advance since January 2022.

CBOT corn and wheat futures also edged higher, though Washington and Beijing did not announce specific trade commitments for those crops.

Corn Cv1 rose 1 cent to $4.31-1/4 a bushel while wheat Wv1 advanced 7 cents to $5.31-1/4 a bushel.

Traders remained cautious over how China's soybean purchasing pledge will translate into actual U.S. exports.

"Confirmation from China is still pending," Commerzbank analysts said. "Until this happens, the upside potential for soybean prices is likely to be limited."