* 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 U.S. trading, changes byline/dateline, pvs PARIS/SINGAPORE)
CHICAGO, Dec 20 (Reuters) - U.S. corn and soybean 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 loomed 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 imports of U.S. agricultural products. However, traders are skeptical that Chinese purchases can meet a U.S. goal of $40 billion to $50 billion over the next two years, compared with $24 billion before the countries' trade dispute.
U.S. President Donald Trump spoke with Chinese President Xi Jinping and claimed progress on issues from trade to North Korea and Hong Kong, 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 has slashed exports of U.S. soybeans and other farm products, as Beijing imposed retaliatory tariffs on American goods and turned to South America for soy instead.
African swine fever, which is fatal, 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.
"But 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) was up 5 cents at $9.29-1/2 a bushel by 12:20 p.m. CST (1820 GMT). It was holding near Tuesday's five-week high of $9.31 and set for a third straight weekly rise.
Corn was up 1 cent at $3.87-1/2 a bushel, near a six-week high of $3.90-1/2 touched on Tuesday. Wheat was down 4-3/4 cents at $5.40-1/2 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)