GRAINS-Soybeans extend gains on Chinese demand hopes; corn and wheat rebound

By Naveen Thukral and Gus Trompiz

SINGAPORE, Nov 10 (Reuters) - Chicago soybeans rose for a second session on Monday as steps by Beijing and Washington to ease trade tensions sustained expectations of a revival of U.S. soybean exports to China.

Corn and wheat also rose, recovering from a two-session slide with support from soybeans and broader strength in financial markets, as investors welcomed progress in the U.S. Senate towards ending a 40-day government shutdown. MKTS/GLOB

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 0.6% at $11.23-3/4 a bushel, as of 1201 GMT.

After tumbling on Thursday, when the absence of confirmed Chinese purchases of U.S. soy dented hopes generated by an end-October trade truce, Chicago soybeans regained ground on Friday when China announced it would restore soybean import licences for three U.S. firms.

"Even if the purchases of U.S. soybeans by China are slow to develop, the market was reassured by observing that the exporters CHS, Louis Dreyfus and EGT had their authorization (restored)," Argus analysts said in a note.

Soybeans nonetheless remained below a 16-month peak struck last week, with modest purchases so far of U.S. farm products by China leaving traders cautious.

"Soybeans have firmed up today, but we are still below the highs seen recently, as we have yet to see China buying big volumes from the U.S.," said one oilseed trader.

Grain participants will be watching weekly U.S. export inspections data - which have been maintained during the federal shutdown - later on Monday for any signs of cargoes that may have been booked by China since last month.

CBOT corn Cv1 added 0.5% to $4.29-1/4 a bushel and CBOT wheat Wv1 was up 1.3% at $5.34-3/4 a bushel.

Wider gains for shares and commodities lent some support to grains. Investors cheered a step in the U.S. Senate on Sunday towards reopening the federal government, whose partial shutdown has sidelined federal workers, delayed food aid and snarled air travel.

Cereal markets remained capped by supplies in major exporting countries, with the U.S. corn harvest winding down, wheat harvesting getting going in Argentina and Australia, and wheat exports from Russia accelerating.

Grain markets are also shifting their attention to the U.S. Department of Agriculture's November supply and demand report, which the agency plans to publish this Friday after skipping its October report due to the shutdown.