GRAINS-Soy rally continues after Trump says China to expand purchases

(Updates for market open, changes dateline from BEIJING/PARIS to CHICAGO) By Heather Schlitz CHICAGO, Feb 5(Reuters) – Chicago soybeans extended gains on Thursday, a day after U.S. President Donald Trump said China had raised a target for U.S. soybean purchases under a trade truce. Corn and wheat ticked up with spillover support from soybeans, though a firmer dollar and easing weather concerns capped the cereal markets. Soybeans rallied on Wednesday after Trump said China was "lifting the soybean count to 20 million tons for the current season", suggesting China could buy 8 million metric tons of U.S. soybeans in 2025/26 on top of approximately 12 million tons already booked since the trade truce in late October. "Honestly, it's the only story right now," said Jason Ward, managing director of Northstar Commodity. The most-active soybean contract on the Chicago Board of Trade was last up 13-1/2 cents to $11.07-1/2 per bushel as of 9:50 a.m. CT (1450 GMT). The news surprised traders who have expected China to focus on buying cheaper Brazilian beans in the coming months as Brazil's new crop comes onto the market. Many traders are optimistic that China will fulfill its verbal commitment to purchase additional bushels, which in addition to demand from other countries and soy processing plants, would drastically change the U.S. soybean supply. Some market players, however, have remained cautious given the potential strain on U.S. supply from the new export volume cited by Trump. Such additional purchases may represent a political gesture by Beijing, despite higher costs, ahead of a planned visit by Trump to China in April, according to analysts. CBOT wheat was up 6-1/2 cents to $5.33-1/4 a bushel while corn added 3 cents to $4.32-1/2 a bushel. Nearly all Russian crops were in normal condition as of February 5, Deputy Prime Minister Dmitry Patrushev was quoted as saying on Thursday. Wheat traders have been monitoring severe cold in U.S., Russian and Ukrainian production belts, but snow cover is expected to limit potential crop losses. (Reporting by Heather Schlitz in Chicago. Additional reporting by Daphne Zhang and Lewis Jackson in Beijing, Gus Trompiz in Paris. Editing by Subhranshu Sahu, Mark Potter and Leroy Leo)

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