GRAINS-Soy hovers near three-month peak as traders watch China demand

By Tom Polansek

CHICAGO, Feb 24 (Reuters) - Chicago Board of Trade soybean futures rose to hover near a three-month high on Tuesday as concerns temporarily eased about upheaval in U.S. tariff policy hurting potential sales to top importer China.

Corn and wheat futures dipped.

Soybean traders were watching to see how China reacted after the U.S. Supreme Court on Friday struck down President Donald Trump's global reciprocal tariffs. Trump then announced a new general rate of 10% that he later said would rise to 15%.

China is closely monitoring U.S. policies and will decide "in due course" whether to adjust countermeasures to U.S. tariffs, a Chinese commerce ministry official said. China is willing to hold frank consultations during an upcoming sixth round of U.S.-China economic and trade talks, the official added.

"The fact that they're still in deal mode is supportive to the market," said Jim Gerlach, president of A/C Trading in Indiana.

UNCERTAINTY OVER CHINESE DEMAND

Most-active CBOT soybean futures Sv1 were up 6 cents at $11.55-3/4 per bushel by 10:45 a.m. CST (1645 GMT). On Monday, the market reached its highest since November 18 at $11.65 before closing lower.

CBOT wheat Wv1 slipped 1-1/4 cents to $5.72-1/2 per bushel after hitting its highest since June 23 at $5.83-1/2 on Monday. Corn Cv1 was down 2-3/4 cents at $4.37-1/2 per bushel.

"Soybeans hope to see buying interest from China, which just returned from Lunar New Year holidays," said Andrey Sizov, head of consultancy Sovecon.

BRAZIL OFFERS CHEAPER SOY

U.S. tariff policy changes had raised doubts over whether China would extend purchases of U.S. soybeans that had resumed following a trade truce in late October. Expectations that China would make fresh purchases had spurred a U.S. soybean rally this month.

Reduced tariff pressure from the United States could encourage China to focus on booking supplies from an expected record Brazilian crop, though immediate competition from Brazil may be curbed by relatively slow harvest progress, traders said.

"We don't see a big upside in soybean prices unless we see China buying U.S. cargoes," an oilseed trader in Singapore said. "Buyers are preferring to take Brazilian cargoes which are much cheaper."