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

By Julie Ingwersen

CHICAGO, Nov 4 (Reuters) - U.S. soybean futures fell on Tuesday, retreating from a 16-month high a day earlier, as traders awaited Chinese purchases of U.S. cargoes following last week's trade truce reached by the world's two largest economies.

Corn followed soybeans lower while broad market declines in crude oil CLc1, metals and Wall Street equities added to bearish sentiment. The dollar .DXY firmed, making U.S. grains less competitive globally. MKTS/GLOB

But wheat futures bucked the lower trend and rose to a three-month peak, with ongoing rumors of Chinese interest in U.S. wheat encouraging investors to cover short positions.

The most-active soybean contract on the Chicago Board of Trade Sv1 settled down 12-3/4 cents at $11.21-1/2 per bushel, having climbed to its highest level since June 2024 on Monday at $11.35-3/4.

Benchmark CBOT corn Cv1 ended down 2-3/4 cents at $4.31-1/2 a bushel. Wheat Wv1 finished up 6-3/4 cents at $5.50-1/4 a bushel after touching its highest level since late July.

Soybeans slid on profit-taking as traders watched for signs of fresh Chinese purchases. The White House 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 cheaper Brazilian cargoes.

Some viewed soybean futures as ripe for a correction in the absence of fresh Chinese bookings.

"The market was overextended to the upside. I think some backing and filling was probably warranted without any bullish news today," said Sherman Newlin, an analyst for Risk Management Commodities.

The U.S. government remains largely shut down, halting the U.S. Department of Agriculture's flash export sales reports.

Corn futures were pressured by brokerage StoneX raising its forecast of the U.S. corn yield slightly, a move that countered recent expectations of declining yield potential.

S&P Global Commodity Insights on Tuesday left its estimate of the average U.S. 2025 corn yield unchanged at 185.5 bushels per acre, but the firm raised its estimates of corn harvested area and production.

Wheat futures advanced, supported by reports of China's interest in buying U.S. wheat, though traders cautioned it was unclear if any purchases had been made.

Open interest in CBOT wheat futures has been declining since mid-October as prices have risen, an indication of traders exiting the market by liquidating short positions.