Wires

GRAINS-U.S. soy, grain futures edge up as China purchases awaited

Nigel Hunt

(Adds quote, updates prices)

LONDON, Dec 23 (Reuters) - Chicago soybean, corn and wheat futures edged up on Monday in quiet conditions as the market waited to see whether agreed purchases of U.S. farm goods by China would materialize.

The Chicago Board of Trade's most active soybean futures contract was up 0.3% at $9.30-3/4 a bushel at 1105 GMT.

"It's the holidays now ... so things will be quiet," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney, regarding market trade.

"The only thing that can change it is if China makes U.S. purchases."

China and the United States have struck a so called "Phase 1" trade deal that includes a commitment by Beijing to increase purchases of U.S. agricultural products. China's top agriculture consultancy said last week the country will make good on a pledge to buy more than $40 billion of American farm goods.

There are some doubts, however, if China will import such a large amount of U.S. farm products and prices have stabilized during the last few days after the trade deal prompted funds to scale back short positions.

Large speculators trimmed their net short positions in Chicago Board of Trade soybean, corn and wheat futures in the week to Dec. 17, regulatory data released on Friday showed.

A huge Brazilian soybean crop entering the market next year could also limit Chinese purchases of U.S. soybeans.

Brazil's 2019/20 soybean harvest is seen coming in at a record 122.7 million tonnes, according to the average forecast in a Reuters survey of 16 market analysts, due to improving weather prospects. This would be up 6.7% from the government's estimate for the previous season.

"Traders remain uncertain over demand prospects created by a U.S.-China trade deal," brokerage Allendale said in a note, adding some believed strong price gains were unlikely given expectations for large supplies early next year.

The CBOT's most active corn contract was up 0.1% at $3.88 a bushel.

Wheat also edged up, with the most active CBOT contract up 0.3% at $5.43-3/4 a bushel, while March milling wheat on Paris-based Euronext rose 0.1% to 186.50 euros a tonne.

The European Union's wheat exports to China this season are expected to reach about 1 million tonnes, led by a run of French sales, after international trade disputes allowed Europe to shift some of its big 2019 crop, grain market sources said.

China is the world's largest wheat grower, but also imports several million tonnes a year to cover its needs. (Additional reporting by Emily Chow; Editing by Rashmi Aich and Mark Potter)