GRAINS-Soybeans ease after rally, wheat holds at three-month high

By Naveen Thukral and Gus Trompiz

SINGAPORE/PARIS, Nov 4 (Reuters) - Chicago soybeans fell on Tuesday from a 16-month high hit in the previous session as traders awaited Chinese purchases of U.S. cargoes following last week's trade truce agreed by the world's two largest economies.

Wheat gained more ground to set a new three-month peak, with ongoing rumours of Chinese interest in U.S. wheat encouraging investors to cover short positions.

Corn tracked soybeans lower, while an increased private forecast for the U.S. corn yield put attention back on large supplies coming in from the nearly complete 2025 harvest.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 ended the overnight trading session down 1.5% at $11.17 a bushel, having climbed to its highest since June 2024 on Monday at $11.35-3/4.

The U.S. administration has said China will buy millions of metric tons of U.S. soybeans under last week's agreement to de-escalate the countries' trade war, with Washington specifying an initial volume of 12 million tons should be booked by the end of December.

However, traders have yet to confirm large purchases of U.S. supplies, while on Monday market sources said Chinese soybean importers have stepped up purchases of Brazilian cargoes after South American prices eased in response to the U.S.-China deal.

"There is a lot of talk of Chinese companies checking prices and looking to book U.S. soybean cargoes," said one Singapore-based oilseed trader. "We are now waiting to see those deals actually materialise."

A U.S. government shutdown is adding to uncertainty over Chinese demand by interrupting the U.S. Department of Agriculture's flash export sales reporting system.

On the supply side, Brazil's soybean planting for the 2025-26 season was lagging last year's pace as of Thursday due to irregular rainfall, consultancy AgRural said on Monday.

But rain this week should leave less than 15% of Brazilian soy and corn areas too dry, Commodity Weather Group said.

CBOT wheat Wv1 was up 0.6% at $5.46-1/2 a bushel, after setting another peak since late July at $5.49-3/4.

The wheat market was supported by reports of China's interest in buying U.S. wheat, including some U.S. soft white wheat, though traders cautioned it was unclear if any purchases had been made.

The reported Chinese interest coupled with dry growing conditions for part of the U.S. winter wheat belt were encouraging participants to cover short positions, traders said.

CBOT corn Cv1 lost 1.0% to $4.30 a bushel.

Brokerage StoneX raised slightly its forecast of the U.S. corn harvest yield, a move that countered recent expectations of declining yield potential.