GRAINS-Soy surges 2%; corn, wheat rally after Trump pauses most tariffs

By Renee Hickman and Julie Ingwersen

CHICAGO, April 9 (Reuters) - U.S. soybean futures soared by 2% on Wednesday while corn and wheat closed higher, rallying along with crude oil CLc1 and equity markets after U.S. President Donald Trump said he would pause the tariff increases he announced last week for most countries, even as he raised them on China.

On the Chicago Board of Trade, May soybeans SK25 settled up 20 cents at $10.12-3/4 per bushel. CBOT May corn CK25 ended up 5 cents at $4.74 a bushel and May wheat WK25 rose 2-1/4 cents to finish at $5.43-1/4 a bushel.

After a choppy start to the session, all three grain markets surged after Trump's announcement .

"It was instantaneous. Trump posted on social media and, just like that, kind of changed the narrative" on tariffs, said Terry Linn, analyst with Chicago-based Linn & Associates.

Grain markets had been affected by a tit-for-tat tariff war that erupted last week between the United States and China, but soybeans were hit hardest, slumping to a four-month low on Monday.

China is the world's biggest soy buyer and takes in around half of U.S. soybean exports each year. Beijing's willingness to retaliate against U.S. tariffs has led to fears of weaker demand for U.S. soybeans, said analysts.

Yet CBOT soybeans led the gains on Tuesday, with soyoil futures BOv1 getting a lift from a jump in crude oil futures. Soyoil is the main U.S. feedstock for biodiesel fuel. O/R

Firm U.S. cash markets for soybeans lent support as well. Farmers have been reluctant to book fresh sales of soybeans or corn at current prices, a factor that has tightened pipeline supplies and prompted some exporters and domestic processors to raise their bids in order to draw out fresh supplies.

Also supporting Chicago soybeans - and corn - was the prospect of increased demand for U.S. biofuel, following a recommendation from an industry coalition to sharply raise federal mandates for biomass diesel blending in 2026.

Wheat gained some support from a weaker U.S. dollar and from dry weather and hot temperatures expected in the U.S. Plains this weekend.

Traders were also positioning themselves ahead of monthly supply/demand report due from the U.S. Department of Agriculture on Thursday, analysts said.