GRAINS-Soy climbs on short-covering ahead of U.S.-China trade talks

(Updates with closing U.S. prices) CHICAGO, Nov 28 (Reuters) - U.S. soybean futures rose on Wednesday on short-covering as investors waited to see if expected talks between Washington and Beijing at a G20 summit this week will defuse a trade dispute that has choked U.S. soybean exports to China. Corn and wheat followed the firm tone, drawing additional support from a sharply weaker dollar, which tends to make U.S. grains more competitive globally. Chicago Board of Trade January soybean futures settled up 15 cents at $8.90-1/2 per bushel. Most active CBOT March corn ended up 4-3/4 cents at $3.73-1/4 a bushel and March soft red winter wheat rose 5 cents at $5.11-1/2 a bushel. Commodity funds hold a net short position in all three commodities, leaving markets vulnerable to short-covering rallies, with the G20 meeting looming. U.S. President Donald Trump is due to meet with Chinese counterpart Xi Jinping for the first time since the world's two largest economies imposed punitive tariffs on each other's imports. Hopes for a U.S.-China trade war ceasefire helped lift Wall Street equities. President Xi, ahead of the G20 meeting in Argentina, said China will widen market access for foreign investors and step up protection of intellectual property rights. Trump is prepared to hike tariffs on Chinese imports if there is no breakthrough, White House economic adviser Larry Kudlow said on Tuesday. "Speculative short-covering ahead of this weekend's G20 summit, on the risk that a headline or tweet could catch fund managers on the wrong side, pushed January soybeans sharply higher," INTL FCStone chief commodities economist Arlan Suderman wrote in a client note. China is by far the top global soy importer, and this year's drop in U.S. soy sales to China coincided with a bumper U.S. harvest, threatening to leave stocks piling up despite brisk shipments to non-Chinese destinations. The U.S. Department of Agriculture said private exporters in the last day sold 268,748 tonnes of U.S. soybeans to unknown destinations. CBOT corn and wheat rose on technical buying. Strength in wheat accelerated as the U.S. dollar tumbled after a speech by Federal Reserve Chairman Jerome Powell eased worries of a faster pace of interest rate hikes next year. Wheat markets have been weighing prospects for increased U.S. exports as stocks from other suppliers wane, although sales from top exporter Russia have remained brisk. "Wheat prices have bottomed out as we are likely to see higher demand for U.S. wheat next year even though Russia is continuing to dominate the export market," said Phin Ziebell, agribusiness economist, National Australia Bank. SovEcon, a Russian agricultural consultancy, on Tuesday raised its forecast of Russia's 2018/19 wheat exports to 34.7 million tonnes, from 34.2 million previously.

CBOT settlement prices:

Net Pct Volume

Last change change

CBOT wheat WH9 511.50 5.0 0.9 60935 CBOT corn CH9 373.25 4.8 1.4 288454 CBOT soybeans SF9 890.50 15.0 1.7 109746 CBOT soymeal SMF9 310.30 3.2 1.0 54472 CBOT soyoil BOF9 27.98 0.6 2.1 64520

NOTE: CBOT March wheat and corn and January soybeans shown in cents per bushel, January soymeal in dollars per short ton and January soyoil in cents per lb.

(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore Editing by Joseph Radford and James Dalgleish)