GRAINS-Corn, soy climb on US-China optimism, Argentina weather jitters

Updates with closing U.S. prices

By Julie Ingwersen

CHICAGO, Jan 17 (Reuters) - U.S. corn futures climbed 2% to a fresh one-year high on Friday and soybeans rose about 1.5% ahead of a long holiday weekend, lifted by Argentine weather worries and cautious optimism about U.S.-China trade relations, analysts said.

Benchmark Chicago Board of Trade corn futures Cv1 settled up 9-3/4 cents at $4.84-1/4 per bushel after reaching $4.85, the highest on a continuous chart of the most-active corn contract since mid-December 2023.

CBOT soybeans Sv1 ended up 15 cents at $10.34 per bushel and wheat Wv1 finished up 1-1/4 cents at $5.38-3/4 a bushel.

Corn and soybean futures hit session highs after U.S. President-elect Donald Trump said he discussed trade and other issues with Chinese President Xi Jinping in a phone call.

Worries about U.S. trade tensions with the world's largest soy buyer have hung over grain markets since Trump's election. Chinese soybean processors have already largely turned to Brazilian cargoes instead of U.S. oilseeds, reflecting cheaper prices for Brazilian soy along with fears that Washington will impose tariffs.

"Anything that indicates potentially less confrontational relations between U.S. and China is at least going to be near-term price supportive," said Randy Mittelstaedt, an analyst with R. J. O'Brien.

Trump's inauguration will take place on Monday, when U.S. markets and most government offices will be closed for the Martin Luther King Jr. holiday.

Traders were also watching weather in Argentina, where weekend rains were expected to give crops a brief reprieve from stressful conditions before dry weather returns. Uncertainty about crop prospects in Argentina, a key supplier of corn and soy products, has supported futures this month.

"The drop in (crop) ratings in Argentina, as indicated from the grain exchanges, is rekindling ideas that crop conditions have deteriorated from the hot temperatures, headed into the rain event that will only provide a little bit of relief," said Terry Reilly, senior agricultural strategist with Marex.

Wheat futures firmed but trailed the other markets, anchored by sluggish global exports.

Despite a setback this week from two-year highs, the dollar's USD= strength against other major currencies remains a burden on U.S. wheat as it faces competition from cheaper Black Sea and Argentine supplies.

(Reporting by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Peter Hobson in Canberra; Editing by Toby Chopra and Nia Williams)

((Julie.ingwersen@thomsonreuters.com; 1-313-484-5283; Reuters Messaging: julie.ingwersen.thomsonreuters.com@reuters.net))