GRAINS-Soybeans retreat after hitting three-month high on China demand hopes

By Heather Schlitz

CHICAGO, Feb 18 (Reuters) - U.S. soybean futures retreated on Wednesday after strong crushing levels and expectations of more Chinese purchases pushed prices to a three-month high, analysts said.

Wheat futures rebounded on technical buying following a 2% slide on Tuesday, and as weather risks and a swift end to the latest peace talks between grain exporters Russia and Ukraine added uncertainty to the market. Corn futures finished nearly flat.

Traders waited to see whether China, the world's biggest soybean importer, would buy more U.S. supplies after prices rallied earlier this month when President Donald Trump said China was considering purchasing an additional 8 million metric tons. The Lunar New Year holiday this week tempered hopes of immediate purchases.

"Funds are still bullish soybeans, and there are hopes China will come in to buy old-crop soybeans," said Nathan Losey, an analyst at AgResource.

"But that story is a couple weeks old and we haven't seen any new action, so the market might be getting exhausted of the topic."

Chicago Board of Trade March soybeans SH26 closed 1/2 cent lower at $11.33-1/2 per bushel. The most-active contract Sv1 earlier reached the highest level since November 18.

CBOT soyoil set contract highs as sources told Reuters that the U.S. Environmental Protection Agency was expected to submit proposed biofuel blending quotas for 2026 to the White House this week for final review. The anticipated quotas kept attention on the prospect of increased biofuel blending requirements, a major source of demand for soyoil.

In January, the U.S. soybean crush reached its highest level on record for the first month of the year, while soyoil stocks ballooned to their highest level since April 2023, according to monthly National Oilseed Processors Association data issued on Tuesday.

On Thursday, the U.S. Department of Agriculture was slated to issue U.S. plantings estimates at an annual conference.

CBOT March wheat WH26 ended up 9-1/4 cents at $5.47 per bushel, and March corn CH26 ended 3/4 cent higher at $4.27 per bushel after falling earlier to a one-week low.