GRAINS-Soybeans pare gains after surge on China demand prospects

Naveen Thukral and Sybille de La Hamaide

* Soybean futures have gained on talk of China quotas

* Wheat and corn nearly unchanged

(Updates prices, adds details) SINGAPORE/PARIS, Oct 23 (Reuters) - Chicago soybean futures pared initial gains on Wednesday as traders booked profits after a surge the previous day on prospects of renewed Chinese purchases. Gains were considered overdone however, according to traders, as prices were too high to trigger immediate demand. Wheat and corn were nearly unchanged. The Chicago Board of Trade most-active soybean contract dropped 0.2% to $9.32-1/2 a bushel by 1130 GMT after hitting $9.39-1/2 in earlier trade. Wheat added 0.1% to $5.18-3/4 a bushel although later delivery contracts were trading slightly lower and corn fell 0.2% at 3.87-1/4 a bushel. Beijing on Tuesday offered major Chinese and international soybean processors waivers that would exempt the companies from steep tariffs on imports of up to 10 million tonnes of U.S. soybeans, according to two people briefed on the matter.

The news on Tuesday had sent soybean prices to within 1/4 cent of their highest point for a most-active contract since the start of the U.S.-China trade war more than 15 months ago. The waivers, however, failed to unleash a flood of immediate buying as U.S. prices remained too high, according to U.S. export traders. Market conditions have continued to determine Chinese buying in recent weeks despite U.S. President Donald Trump's assurances of a wave of imminent sales. "There is talk of Chinese buying which is supportive for prices, but the upside potential is limited," said one Singapore-based grains trader. "China's soymeal demand has been hit by African swine fever." China's pig herd in September was 41.1% smaller than it was a year earlier, the agriculture ministry said on Monday, as a year-long African swine fever epidemic continued to slash the world's largest herd. Also weighing on soybean prices were forecasts for normal- to below-normal precipitation for a large part of the U.S. farm belt over the next two weeks that should allow for more active harvesting in most areas. Wheat was pressured by a lack of competitiveness of U.S. origins on world markets. Algerias state grains agency, OAIC, has purchased about 600,000 tonnes of milling wheat for December shipment in a tender that closed on Tuesday, European traders said. The wheat can be sourced from optional origins, but traders suspected the grain may well be sourced in France, Algeria's main wheat supplier. Drought across most Ukrainian regions is likely to reduce the area sown in the 2020 winter grain harvest, the head of Ukraine's state weather forecasting centre said on Tuesday.

Ukraine and Russia, its main rival on Black Sea grain exports, have been both looking for more rains this autumn. In Russia, though, warm and rainy weather has speeded up sowing in recent weeks. Commodity funds were net buyers of Chicago Board of Trade corn, soybean and soyoil futures contracts on Tuesday and net sellers of wheat and soymeal futures, traders said.

Prices at 1130 GMT

Last Change Pct End YtdMove 2018 Pct


CBOT wheat 518.50 0.50 0.10 503.25 3.03CBOT corn 387.00 -1.00 -0.26 375.00 3.20CBOT soy 932.75 -1.25 -0.13 895.00 4.22Paris wheat Dec 180.50 -0.50 -0.28 191.25 -5.62Paris maize Nov 164.25 -0.50 -0.30 175.25 -6.28Paris rape Nov 376.75 0.75 0.20 364.00 3.50WTI crude oil 53.92 -0.56 -1.03 45.41 18.74Euro/dlr 1.11 0.00 -0.04 1.1469 -3.05

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

(Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips and Shounak Dasgupta)