Chicago Board of Trade (CBOT) wheat futures settled lower on Tuesday over raised U.S. inventories, while soybeans traded higher amid optimism on trade talks with China.

The U.S. Department of Agriculture (USDA) released on Tuesday its December supply and demand report, in which U.S. wheat inventories at the end of the 2018/19 marketing year were raised to 974 million bushels, up from 949 million last month.

The larger ending stocks led to the fall of CBOT wheat futures.

Although USDA's forecast on U.S. soybean inventories was unchanged at 955 million bushels, but hopes among traders that Chinese importers would again buy U.S. soybeans, as the two sides agreed to push forward trade talks, supported the oil seed prices.

The USDA report also raised 2018/19 world corn ending stocks, based on the U.S. increase due to reduced ethanol production. Still, the corn futures managed to close in positive territory.

At the end of Tuesday's session, the most active March 2019 corn was up 0.75 cents, or 0.2 percent to close at 3.8475 dollars per bushel. March wheat was down 4.25 cents, or 0.81 percent to settle at 5.21 dollars. January soybeans were up 5.25 cents, or 0.58 percent to settle at 9.15 dollars per bushel.