GRAINS-US wheat rises for 2nd session on strong demand, soybeans rebound

* Wheat gains more ground on expectations of strong demand Soybeans set to rise for 5 out of 6 sessions

* Market expects China to buy more U.S. soybeans, grains

(Updates prices, adds comment, changes dateline/byline) SINGAPORE/PARIS, Jan 9 (Reuters) - Chicago wheat futures rose for a second session on Wednesday, gaining 1 percent on expectations of increased demand for U.S. cargoes as rival exporters in the Black Sea region run out of surplus supplies. Soybean prices bounced back and were set to gain for five out of six sessions, as Washington-Beijing trade talks boost hopes for higher U.S. soybean sales to top importer China. The most-active wheat contract on the Chicago Board of Trade climbed 1.0 percent to $5.23 a bushel by 1200 GMT, having hit its highest since Dec. 20 at $5.24-1/2 a bushel on Tuesday. Soybeans were up 0.2 percent at $9.20-3/4 a bushel after closing down 0.6 percent on Tuesday. Corn added 0.6 percent to $3.82-1/4, having closed down 0.6 percent in the previous session. "Global wheat markets have been simmering for a long time and are now threatening to break out," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. "For most of 2018 we had Russian wheat weighing heavily on the market, but that pressure is pretty much gone as we start 2019. We have seen U.S. wheat being about the cheapest wheat in the world and there are strong signs demand has been picking up over the last week." China and the United States will continue trade talks in Beijing for an unscheduled third day as officials from the world's two largest economies seek resolve their bitter trade row that has slashed China's imports of U.S. soy. In a positive sign on Tuesday, China approved five genetically-modified crops for import, the first in about 18 months, which could boost its overseas grains purchases and ease pressure from the United States to open its markets to more farm goods. "This is likely to have merely symbolic value for as long as the punitive tariffs remain in force, however. After all, U.S. soybeans are simply too expensive for Chinese importers at import tariffs of 25 percent," Commerzbank said in a note, adding that this explained why prices did not surge on the news. Adverse crop-weather in top soybean exporter Brazil is providing further support to prices. Brazil has harvested two enormous soybean crops in a row and will likely see a third in 2019, but the volume might not be as big as market participants were initially expecting, potentially a particular concern for top customer China, Reuters market analyst Karen Braun wrote in a column. "Abundant Brazilian supply has allowed China to hold off longer on buying U.S. beans," she said. INTL FCStone cut its estimate of Brazil's soybean crop by about 4 million tonnes to 116.25 million tonnes due to a drought affecting some areas.

Prices at 1200 GMT

Last Change Pct End Ytd Move 2018 Pct

Move

CBOT wheat Dec 523.00 5.25 1.01 503.25 3.92 CBOT corn Dec 382.25 2.25 0.59 375.00 1.93 CBOT soy Dec 920.75 2.25 0.24 895.00 2.88 Paris wheat Mar 206.75 0.75 0.36 203.25 1.72 Paris maize Nov 182.75 0.00 0.00 178.50 2.38 Paris rape Aug 368.00 -0.50 -0.14 364.50 0.96 WTI crude oil 50.86 1.08 2.17 45.41 12.00 Euro/dlr 1.1455 0.00 0.13 1.1469 -0.12

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Naveen Thukral and Sybille de La Hamaide Editing by Joseph Radford and Edmund Blair)