GRAINS-Soy dips on outlook for big Brazilian crop; corn rises
* Traders wait for USDA to issue crop data on Friday
* Brazil soy crop seen up 0.9 percent from last month -poll
* Positioning seen ahead of major data release
* Export demand increases after recent decline in prices
(Updates prices, adds Conab details, analyst quotes) CHICAGO, Jan 8 (Reuters) - U.S. soybean futures slumped Tuesday on expectations that near-record South American production will reduce demand for the U.S. crop, while corn and wheat futures edged higher. Activity in soybeans was choppy, with the market shifting between positive and negative territory ahead of the close of trading. Soybean prices were pressured by expectations that Brazil's government crop agency, Conab, on Wednesday will increase its estimate for the soybean harvest, said Mike Zuzolo, president of Global Commodity Analytics & Consulting. Conab last month pegged Brazil's crop at 82.6 million tonnes, which was already above the U.S. Department of Agriculture's latest estimate of 81 million tonnes. "I've been hearing a lot about the Conab number," Zuzolo said. "The beans are probably seeing a little bit of profit-taking." The USDA will release major reports of its own on Friday on global supply and demand and U.S. quarterly grain inventories. 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 years 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 3/4 cent, or 0.05 percent, to $13.87-3/4 a bushel by 1:30 p.m. Central time (1930 GMT). CBOT March corn rose 5 cents, or 0.7 percent, to $6.90-1/2 a bushel, while March wheat gained 2-1/4 cents, or 0.3 percent, to $7.53-1/2.
SOY COMPETITION Traders were waiting to see how the USDA adjusts its estimates for soybean and corn production in South America, as Brazil and Argentina compete with the United States for export business. The USDA is expected to increase its estimate for Brazil's soybean crop by 0.9 percent from last month to a record-high 81.8 million tonnes, according to a Reuters poll. The outlook for Brazil's corn crop is expected to rise 0.4 percent to 70.257 million tonnes. The USDA is projected to increase its forecast for global soybean inventories at the end of the crop's marketing year on Sept. 1 by 0.4 percent from last month to 60.2 million tonnes, according to a poll. The forecast for global corn inventories is seen down 0.03 percent at 117.572 million tonnes. "South American crop expectations are keeping a lid on soybean prices," said Ker Chung Yang, a senior investment analyst at Phillip Futures in Singapore.
RENEWED DEMAND Traders also eyed renewed export demand for corn 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. "It is interesting to see they are buying a little bit," said Rich Nelson, chief strategist for Allendale. "Maybe some of these world buyers consider corn, not necessarily U.S. corn but corn as a whole, is a value at these prices." 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 1:32 p.m. CST (1932 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 690.75 5.25 0.8% 6.8% CBOT soy 1416.50 5.75 0.4% 18.2% CBOT meal 410.60 2.10 0.5% 32.7% CBOT soyoil 49.20 -0.30 -0.6% -5.5% CBOT wheat 753.50 2.25 0.3% 15.4% CBOT rice .00 0.00 0.0% -100.0% EU wheat 254.75 4.25 1.7% 25.8%US crude 93.25 0.06 0.1% -5.6% Dow Jones 13,321 -62 -0.5% 9.0% Gold 1659.64 13.00 0.8% 6.1% Euro/dollar 1.3080 -0.0035 -0.3% 1.0% Dollar Index 80.3610 0.1050 0.1% 0.2% Baltic Freight 734 22 3.1% -57.8%
(Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by Alison Birrane, Sofina Mirza-Reid and Tim Dobbyn)