GRAINS-Soy dips, corn rises as traders wait for U.S. crop data
* Traders wait for USDA to issue crop data on Friday
* Positioning seen ahead of major reports
* Export demand increases after recent decline in prices
(Adds quotes, updates prices, changes datelines from LONDON) CHICAGO, Jan 8 (Reuters) - U.S. soybean futures eased slightly on Tuesday as expectations for near-record South American production kept the market on the defensive while corn and wheat edged higher. Dealers said the market's focus was increasingly turning to U.S. Agriculture Department supply-demand and quarterly inventory reports due out on Friday, with investors reluctant to take large positions ahead of the data. Traders were evening up positions ahead of the reports due to a "natural tendency for risk aversion," said Jim Gerlach, president of A/C Trading. Trading has been particularly volatile following previous January supply-and-demand and inventory reports, with corn making limit moves on the day of the release six times in a row. "You're going into a major crop report; you've seen a substantial break in prices; and these reports tend to be game changers," Gerlach said. Chicago Board of Trade March soybeans slipped 1 cent, or 0.1 percent, to $13.87-1/4 a bushel by 9:45 a.m. Central time (1545 GMT). CBOT March corn rose 2-3/4 cents, or 0.4 percent, to $6.88-1/4 a bushel, while March wheat gained 3-1/2 cents, or 0.5 percent, to $7.54-3/4. Traders were waiting to see how USDA adjusts its estimates for soybean and corn production in South America on Friday as Brazil and Argentina compete with the United States for export business. Brazil is expected to harvest a record-large soybean crop due to favourable weather. "South American crop expectations are keeping a lid on soybean prices," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
RENEWED DEMAND Traders also eyed renewed export demand for farm products following a holiday lull and a recent decline in prices. South Korea's Major Feedmill Group (MFG) bought a combined 137,000 tonnes of corn for arrival in May, while the Korea Feed Association (KFA) bought 110,000 tonnes of corn likely to be sourced from South America, traders said.
A group of private Israeli buyers has issued separate international tenders to purchase 135,000 tonnes of corn and up to 50,000 tonnes of feed wheat of option origin, traders said. Corn and soybean futures have dropped sharply early in the new year, attracting interest from importers. On Jan. 4, corn futures hit their lowest levels in about six months and soybeans hit a six-week low, pressured by prospects for good South American crops in early 2013 and China's cancellation of soybean import contracts.
Prices at 9:44 a.m. CST (1544 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 690.50 5.00 0.7% 6.8% CBOT soy 1414.00 3.25 0.2% 18.0% CBOT meal 409.30 0.80 0.2% 32.3% CBOT soyoil 49.26 -0.24 -0.5% -5.4% CBOT wheat 756.50 5.25 0.7% 15.9% CBOT rice .00 0.00 0.0% -100.0% EU wheat 253.75 3.25 1.3% 25.3%US crude 92.82 -0.37 -0.4% -6.1% Dow Jones 13,325 -59 -0.4% 9.1% Gold 1654.20 7.56 0.5% 5.8% Euro/dollar 1.3066 -0.0049 -0.4% 0.9% Dollar Index 80.4220 0.1660 0.2% 0.3% Baltic Freight 734 22 3.1% -57.8%
(Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by Alison Birrane and Sofina Mirza-Reid)