* U.S.-China initial trade deal fuels soy demand expectations
* Hopes tempered by S. America crops, swine fever in China
* Corn also firm, set for second straight weekly rise (Adds closing prices, forecast from Chinese agriculture consultancy)
CHICAGO, Dec 20 (Reuters) - U.S. soybean and corn futures ticked higher on Friday as traders adjusted positions ahead of the year-end holidays.
Lingering uncertainty over demand prospects created by a U.S.-China trade deal hung over the markets.
Crop prices increased after Washington and Beijing last week struck a Phase 1 trade deal that includes a commitment by Beijing to increase purchases of U.S. agricultural products. China's top agriculture consultancy said the country will make good on a pledge to buy more than $40 billion of American farm goods.
However, traders remain skeptical that Chinese purchases can meet the U.S. goal. Sales were $24 billion before the dispute.
U.S. President Donald Trump spoke with Chinese President Xi Jinping and claimed progress on trade, a week after the deal, but China said Xi accused the United States of interfering in its internal affairs.
"China is still buying, but we don't have signatures," said Karl Setzer, commodity risk analyst for AgriVisor. "In the back of everybody's mind, they're thinking, 'Is this really going to pan out?"'
Soybeans are the most valuable U.S. crop export to China, with sales of $12 billion in the year before the countries' trade war began. The dispute slashed U.S. exports as Beijing imposed retaliatory tariffs on American goods and turned to South America for soybeans instead.
African swine fever, a fatal pig disease, has reduced China's need for soy to feed the world's largest hog herd.
"The trade war had certainly depressed soybean prices," said Phin Ziebell, agribusiness economist at National Australia Bank.
"We are unlikely to see strong gains as there are expectations of abundant supplies early next year. Brazilian crop is looking absolutely monster, Argentina has had favourable weather and African swine fever is curbing Chinese demand."
The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 3-3/4 cents to $9.28-1/4 a bushel and closed higher for the third straight week. The market ended near Tuesday's five-week high of $9.31.
Corn gained 1-1/4 cents to close at $3.87-3/4 a bushel, near a six-week high of $3.90-1/2 reached on Tuesday. Wheat fell 3 cents to $5.42-1/4 a bushel at the CBOT.
Trading volumes were weak. "It's holiday trade," Setzer said. (Reporting by Tom Polansek in Chicago; Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Chizu Nomiyama and Richard Chang)