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GRAINS-Soy hits two-week high on Brazil crop questions; U.S.-China trade hopes

far the world's largest soy buyer.

hopes@ (Updates prices, adds quotes; changes byline, dateline, previous PARIS/SYDNEY) CHICAGO, Jan 25 (Reuters) - U.S. soybean futures climbed to a two-week high on Friday on worries about the size of Brazil's crop and short-covering ahead of planned U.S.-China trade talks next week, traders said. Corn firmed, following strength in soybeans, while wheat drifted lower, pressured by news that a private forecaster had raised its estimate of Russian wheat exports. As of 1:01 p.m. CST (1901 GMT), Chicago board of Trade March soybeans were up 7 cents at $9.23 per bushel after reaching $9.23-3/4, the contract's highest since Jan. 10. CBOT March corn was up 2-1/4 cents at $3.79-1/4 a bushel while March wheat was down 1/2 cent at $5.21 a bushel. Soybeans led the way up as traders mulled South American crop prospects. "It probably has more to do with dry conditions in Brazil (and) talk of a smaller crop in the country," said Brian Hoops, president of Midwest Market Solutions. He added, "We are seeing a little technical buying coming into the soybean market as we make new highs." Parana state, Brazil's second-largest soybean producer, on Thursday cut the forecast for its 2018-19 harvest to 16.8 million tonnes from 19.1 million, after a dry spell last month.

Traders were also adjusting positions ahead of U.S.-China trade talks scheduled in Washington on Jan. 30 and 31. China is "Next week's scheduled U.S.-China trade talks ... raise hopes that China will make more 'good-faith' purchases to influence the talks, which is particularly supportive for the grain and oilseed markets today," INTL FCStone chief commodities economist Arlan Suderman wrote in a note to clients. Corn followed soybeans higher, but wheat futures declined, extending Thursday's retreat from a five-week high in the CBOT March contract. In Russia, the world's biggest wheat exporter, rising prices, suggestions of stricter export inspections and a truck driver dispute have fueled expectations the country will fade from wheat export markets and leave more room for shipments from other suppliers like the United States. But there has been limited evidence so far of an upswing in U.S. exports, and Russia's Sovecon agriculture consultancy on Friday raised its forecast of Russia's 2018/19 wheat exports to 35.6 million tonnes, from 35.1 million previously.

CBOT prices as of 1300 CST (1900 GMT):

Last Net Pct Volume

change change

CBOT wheat WH9 520.75 -0.75 -0.1 41427CBOT corn CH9 379.00 2.00 0.5 94955CBOT soybeans SH9 923.00 7.00 0.8 76955CBOT soymeal SMH9 312.90 0.60 0.2 27352CBOT soyoil BOH9 29.98 0.47 1.6 49144

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

(Additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney Editing by Edmund Blair and James Dalgleish)