GRAINS-U.S. soybeans turn up on hopes for Chinese buying; wheat sags

(New throughout; updates prices, adds quotes, changes byline, changes dateline from previous HAMBURG) CHICAGO, Dec 11 (Reuters) - U.S. soybean futures turned higher on Tuesday as traders anticipated potential Chinese purchases of U.S. agricultural products, and shrugged off a bearish monthly global soy inventories report from the U.S. Department of Agriculture. Corn firmed, led by soybeans, but wheat futures fell after the USDA raised its forecasts of U.S. and global wheat ending stocks more than most analysts expected. The USDA also raised its forecast of world 2018/19 soy ending stocks to 115.33 million tonnes, topping a range of estimates. At 1:06 p.m. CST (1906 GMT), Chicago Board of Trade January soybeans were up 5-3/4 cents at $9.15-1/2 per bushel, but stayed within a trading range established in recent days. March corn added 1/2 cent at $3.84-3/4 a bushel. "All indications seem to be that you should see an announcement here at least for China to buy enough beans to replenish reserves," said Terry Linn, analyst with Linn & Associates, a Chicago brokerage. "The market is terrified right now," Linn said. "How can you sell beans when you've got this trade announcement coming out at any time?" U.S. soybean exports to China, by far the world's largest buyer, collapsed after China slapped tariffs on U.S. supplies as the trade war between the two countries heated up. China and the United States discussed a road map for the next stage of their trade talks on Tuesday during a telephone call as a report that China is moving to cut tariffs on American-made cars boosted automakers' shares. A decline in Brazilian soy export prices in recent weeks and falling Chinese domestic soy prices hint at prospects for a package of purchases of U.S. agricultural goods, Linn said. U.S. President Donald Trump and Chinese President Xi Jinping agreed at a Dec. 1 meeting in Argentina to a truce that delayed a planned Jan. 1 U.S. increase of tariffs to 25 percent from 10 percent on $200 billion worth of Chinese goods. "The markets are still waiting for concrete evidence that China is again buying U.S. soybeans," said Matt Ammermann, commodity risk manager with INTL FCStone. "There were reports that China may buy 5 million tonnes of U.S. agricultural products but real signs of purchases are lacking, especially in U.S. soybeans." CBOT wheat futures declined, with the March contract down 4-3/4 cents at $5.20-1/2 per bushel. Wheat was pressured after the USDA, in its monthly supply/demand report, raised its forecast of U.S. 2018/19 wheat ending stocks to 974 million bushels from 949 million in November, above the average trade expectation for 956 million bushels. The increase reflected a reduction in the government's forecast of U.S. wheat exports. "USDA taking the wheat exports down by 25 million bushels basically removes hope that the U.S. will regain a considerable amount of market share in the second half of the crop year," said Terry Reilly, senior analyst with Futures International.

CBOT prices at 1:05 p.m. CST (1905 GMT):

Net Pct Volume

Last change change

CBOT wheat WH9 520.50 -4.75 -0.9 50215 CBOT corn CH9 384.75 0.75 0.2 123319 CBOT soybeans SF9 916.25 6.50 0.7 89103 CBOT soymeal SMF9 311.40 1.40 0.5 45811 CBOT soyoil BOF9 29.02 0.26 0.9 44593

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 Michael Hogan in Hamburg; Editing by David Evans and Jeffrey Benkoe)