GRAINS-Soybeans ease as Mideast tensions outweigh trade optimism

Gus Trompiz and Naveen Thukral

* Soybeans retreating from 18-month high at year-end

* U.S.-Iran tensions, tepid weekly exports cool sentiment

* Wheat also extends pullback from 16-month top

* Market eyes USDA data, U.S.-China trade deal for more impetus

(Updates with European trading, changes byline/dateline) PARIS/SINGAPORE, Jan 6 (Reuters) - Chicago soybean futures fell for a second straight session on Monday as tensions in the Middle East unsettled investors and took attention away from a U.S.-Chinese trade agreement that helped soybeans reach a 1-1/2 year high last week. Wheat extended a pullback from an 16-month peak touched last week. Corn was little changed after falling on Friday. Geopolitical tensions after the United States killed an Iranian general erased new year gains for world stocks while safe-haven gold climbed to a seven-year high and oil jumped to its highest since September. Developments in the Middle East eclipsed an initial trade accord between Washington and Beijing that had buoyed crop markets last month, while disappointing weekly U.S. soybean sales reported on Friday also dampened demand hopes. The most-active soybean contract on the Chicago Board Of Trade was down 0.2% at $9.39-1/4 a bushel by 1321 GMT. Soybeans slid around 1.5% on Friday when prices retreated from Thursday's high of $9.61, a level not seen since June 2018. CBOT wheat was down 0.8% at $5.50-1/4 a bushel, easing further from Thursday's high of $5.67-1/2. Corn inched down 0.1% to $3.86 a bushel. "Falling demand is a key concern for the market and the added uncertainty about Iran, and how that may impact the whole world," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney. The United States Department of Agriculture (USDA) said on Friday total U.S. soybean export sales last week were 332,047 tonnes, below analysts' expectations of 350,000 tonnes-1.05 million tonnes. China bought 160,241 tonnes for 2019/20 delivery, including about 132,000 tonnes switched from unknown destinations.

Traders were watching to see if the so-called Phase 1 trade agreement between Washington and Beijing, under which China has pledged to increase purchases of U.S. farm goods, translates into significantly higher crop shipments. U.S. President Donald Trump has said the first-stage trade deal would be signed on Jan. 15 at the White House. Grain markets are also awaiting further fundamental direction from USDA crop estimates this Friday. The Jan. 10 data will give further indications about the size of last year's corn harvest, delayed by cold, wet weather, as well as projections of world grain supply and demand. Rainfall alleviating dry conditions in Brazil, the world's biggest soybean exporter, also curbed Chicago grain prices. "Most Brazil first-crop corn and soybean areas saw beneficial rainfall over the past week," Refinitiv Agriculture Research analysts said in a note, adding that widespread rainfall was expected over the next week.

Prices at 1321 GMT

Last Change Pct End Ytd PctMove 2019 MoveCBOT wheat 550.25 -4.25 -0.77 558.75 -1.52CBOT corn 386.00 -0.50 -0.13 387.75 -0.45CBOT soy 939.25 -2.25 -0.24 955.50 -1.70Paris wheat Mar 188.00 -0.50 -0.27 188.75 -0.40Paris maize Mar 172.25 -1.00 -0.58 171.75 0.29Paris rape Feb 414.50 -0.75 -0.18 411.50 0.73WTI crude oil 63.71 0.66 1.05 61.06 4.34Euro/dlr 1.12 0.00 0.30 1.1210 -0.16

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

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore, Editing by Sherry Jacob-Phillips and David Evans)