GRAINS-Soybeans set for 3rd week of gains on U.S.-China trade hopes

* Chicago soybean futures rise 5.5% in 3 weeks of gains * Expectations of higher Chinese demand driving prices higher * Forecasts of record output in Brazil cap gains (Adds details, comments) By Naveen Thukral SINGAPORE, Dec 20 (Reuters) - Chicago soybean futures ticked higher on Friday, with the market set for a third consecutive week of gains on expectations of higher Chinese demand following an initial trade deal between Washington and Beijing. Corn and wheat were on course for their second straight weekly gain. The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $9.25-1/4 a bushel by 0233 GMT. The market has gained 5.5% so far in December. Corn was up 1.4% for the week, while wheat was up 2.4%. U.S. Treasury Secretary Steven Mnuchin said on Thursday the United States and China would sign the phase one trade deal at the beginning of January. Chinese importers bought at least two cargoes of U.S. soybeans after receiving another round of tariff-free quota for U.S. shipments on Tuesday, traders in both countries said. "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." Favourable crop weather could boost production in Argentina and Brazil, increasing global supplies and competition for export sales to buyers like China. Rains will ease dry conditions in southern Argentina and also bring relief to drier areas of Brazil, Commodity Weather Group said. Argentine soy planting advanced 8.9 percentage points over the last week, reaching 70.2% of expected sowing area thanks to rains that relieved excessively dry conditions, the Buenos Aires Grains Exchange said in a report on Thursday. Brazil's 2019/2020 soybean crop could reach a record 122.7 million tonnes, according to the average forecast in a Reuters survey of 16 market analysts carried out earlier this month. The spread of African swine fever across China has reduced the amount of soymeal the country needs to feed pigs. The disease has decimated China's pig herd since the first outbreaks were discovered last year. Commodity funds were net sellers of CBOT corn, soybean, wheat and soymeal futures contracts on Thursday, and net buyers of soyoil futures, traders said. Grains prices at 0233 GMT Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 545.25 0.00 +0.00% -0.55% 526.23 57 CBOT corn 386.75 0.25 +0.06% +6.98% 363.51 67 CBOT soy 925.25 0.75 +0.08% +2.29% 896.70 73 CBOT rice 13.00 -$0.04 -0.34% -0.27% $12.56 87 WTI crude 61.09 -$0.09 -0.15% +0.26% $58.22 Currencies Euro/dlr $1.112 $0.000 -0.04% +0.05% USD/AUD 0.6896 0.001 +0.17% +0.64% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Reporting by Naveen Thukral)

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