SINGAPORE - Chicago soybeans dropped on Thursday, declining for the first time in five sessions, on a lack of purchases of U.S. cargoes by China despite trade talks between the two nations.

Wheat slid for a second session on concerns over dismal demand for U.S. supplies.

At a gathering of G20 countries in Argentina on Saturday, U.S. President Donald Trump agreed to hold off on new tariffs during a 90-day truce period, while his Chinese counterpart Xi Jinping pledged to purchase more agricultural products from U.S. farmers immediately, according to the White House.

But China is yet to make any purchases.

The most-active soybean contract on the Chicago Board of Trade fell 0.6 percent to $9.08-1/4 a bushel by 0248 GMT, while wheat lost 0.1 percent to $5.17-1/2 a bushel and corn was unchanged at $3.84-1/4 a bushel.

"China hasn't started buying U.S. soybeans," said one Singapore-based trader. "We have pressure from other markets which have dropped after Canada arrested a senior executive of Huawei."

U.S. stock futures and Asian shares tumbled on Thursday after Canadian authorities arrested a top executive of Chinese tech giant Huawei for extradition to the United States, fanning fears of a fresh flareup in tensions between the two superpowers.

Forecasts of a record soybean harvest in Brazil provided additional headwinds to Chicago futures as bumper supplies from the South American agricultural powerhouse could reduce China's need for U.S. beans.

Analysts polled ahead of a monthly U.S. Department of Agriculture report next week pegged Brazil's 2018/19 soybean crop at 120.88 million tonnes, up slightly from the agency's prior-month view.

Brazilian consultancy Celeres said the next harvest could approach an all-time high of 130 million tonnes.

Brazil, which accounts for some 7 percent of the world's grain output, has the potential to expand arable land for agriculture on an estimated 43 million hectares in the vast central Cerrado region, a grain producing company said on Wednesday.

China will ramp up imports of Argentine soyoil after Argentina begins harvesting its next soy crop in March, a government official told Reuters, but talks toward reaching a deal to sell soymeal livestock feed to China have fizzled.

The wheat market is being weighed down by demand concerns, including from top importer Egypt. The country has not issued letters of credit covering 16 purchased cargoes, effectively delaying payment and causing confusion among suppliers, sources familiar with the matter told Reuters on Wednesday.

The cargoes included one of U.S. wheat, a sale that had raised hopes U.S. shipments would accelerate as supplies in top wheat exporter Russia dwindled.

(Reporting by Naveen Thukral; Editing by Sunil Nair)

© Reuters News 2018