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GRAINS-Soybeans and corn unchanged ahead of U.S.-China trade deal
* Markets await signing of U.S.-China Phase 1 trade deal
* Uncertainty over lack of detail about deal
* Big Brazilian soybean harvest weighs
* Strong EU prices support wheat
* (Recasts with European trade, adds quotes, changes dateline)
By Michael Hogan
HAMBURG, Jan 14 (Reuters) - Chicago soybean and corn were little changed on Tuesday, drifting as dealers awaited the signing of the Phase 1 trade deal which could reopen China’s giant market to U.S. grain and farm product exports.
Wheat rose, supported by continued strength in European prices and big export tenders.
Chicago Board of Trade (CBOT) most-active soybeans were unchanged at $9.42-1/4 a bushel at 1205 GMT.
Corn was unchanged at $3.89-1/2 a bushel and wheat rose 0.8% to $5.67-1/4 a bushel.
The U.S. and China are expected to sign a Phase 1 trade deal on Wednesday to start resolving their trade war which led to a massive cut in exports of U.S. soybeans, corn and other farm products to China.
Reports say China has agreed to hugely increase U.S. food and farm product imports but the text of the proposed agreement has not been released, leaving markets uncertain.
"Markets are drifting today until we see the actual signing of the phase one trade deal between the U.S. and China and crucially the actual details of the deal as we still know almost nothing," said Matt Ammermann, commodity risk manager with INTL FCStone.
"China has said so much about buying from the U.S. in past months but then done very little.
"Markets want to see signs of China actually buying U.S. soybeans, grains and meat and shipping them out before reacting. There have been too many false hopes in the long trade war.”
But even if China’s market is reopened to American soybeans, U.S. exporters face tough competition from a huge soybean harvest in Brazil in early 2020 following good recent weather.
"Grain markets also saw downside pressure from South American crops as beneficial weekend rains helped fields in Brazil," brokerage Allendale said.
Ammermann added: "This means the U.S. will face price competition in the Chinese market and Brazilian soybeans are also likely to be sold aggressively in the rest of the world."
Euronext European wheat futures rose again on Tuesday after on Monday reaching their highest in over seven months as supply difficulties in France caused by transport strikes added to support from brisk overseas demand.
"Wheat is being strengthened today by firm Euronext futures in Europe," Ammermann said. "When European prices rise, export prices in the Black Sea will also be expected to rise. International demand also looks strong with large purchase tenders in the market including from Egypt and Turkey."
(Reporting by Michael Hogan, additional reporting by Naveen Thukral, editing by Ed Osmond)
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