GRAINS-Soybeans fall on forecasts for big Brazilian crop
* Brazil on track for bumper soybean output
* Risk avoidance ahead of USDA report
* Wheat firmed by supply concerns
(Recasts with price weakness in European trade) HAMBURG/SINGAPORE, Jan 9 (Reuters) - Soybean futures fell on Wednesday, pushed down by forecasts that large Brazilian crops will reduce demand for U.S. supplies, but with markets weakened by risk-aversion ahead of key U.S. Department of Agriculture (USDA) reports on Friday. Brazil will produce a record 82.7 million tonnes of soybeans in early 2013, government agency Conab said on Wednesday, raising its forecast from the 82.6 million tonnes it estimated in December and way up from 66.5 million tonnes harvested last season. "The weather in South America has been improving and the latest Brazilian soybean and corn crop forecast from Conab on Wednesday again provided an indication that we are not looking at the kind of poor sized harvests we saw in the region last year," said Rabobank analyst Erin FitzPatrick. Investors in the agricultural markets are also taking positions ahead of the USDA global supply and demand report on Friday. "The uncertainty about the USDA reports on Friday is the dominant driver for the markets this week and there is risk aversion which is a weakening factor especially for corn and soybeans," said FitzPatrick. "Wheat is getting some support from supply concerns with the drought in the U.S. and weather in Russia. But the U.S. is still quite a long way from planting so what happens with USDA reports on Friday will also dominate wheat this week." Corn was also underpinned by renewed global demand. Chicago Board of Trade March soybeans fell 0.02 percent to $13.86-1/4 a bushel at 1216 GMT. Chicago March corn was down 0.04 percent at $6.88-1/2 a bushel. March wheat rose 0.1 percent to $7.51-3/4 a bushel. The USDA on Friday is expected to raise its forecast of Brazil's soybean harvest by 0.9 percent from last month to 81.8 million tonnes, according to a Reuters poll. For soybeans, the USDA is forecast to raise its estimate of the drought-hit U.S. 2012 soybean harvest this week, reflecting a slightly higher yield than previously thought. U.S. soybean exports are likely to struggle as Brazil kicks off its marketing season in February with a record crop. The USDA, in its final report on U.S. 2012 corn production, is expected to estimate last year's drought-decimated corn crop at a six-year low.
"Most people expect the report will have a reduction in corn production numbers from what was reported in December," said Brett Cooper, a senior markets manager at INTL FCStone Australia. "Some people also consider the USDA might have overstated wheat usage for animal feed, which implies there might be higher consumption of corn." Rabobank's FitzPatrick added: "Although prices have been coming down early in the new year they are still historically high so there is some downside risk if there is a bearish report." But the corn market is being underpinned by an increase in global demand following a lull in purchase tenders over the winter holidays. South Korea's Feed Leaders Committee (FLC) on Wednesday purchased 69,000 tonnes of corn, 55,000 tonnes of feed wheat and 45,000 tonnes of soymeal in a tender, European traders said. South Korea's Major Feedmill Group (MFG) on Tuesday bought 137,000 tonnes of corn for arrival in May, while the Korea Feed Association (KFA) bought 110,000 tonnes of corn. In addition, a group of private Israeli buyers issued international tenders on Tuesday to purchase 135,000 tonnes of corn and up to 50,000 tonnes of feed wheat.
* Prices at 1216 GMT
Product Last Change Pct Move End 2011 Ytd PctParis wheat 246.75 1.00 +0.41 195.25 26.38 London wheat 206.90 0.00 +0.00 153.65 34.66 Paris maize 236.75 0.00 +0.00 197.25 20.03 Paris rape 467.75 7.00 +1.52 421.50 10.97 CBOT wheat 752.00 1.50 +0.20 671.25 12.03 CBOT corn 688.75 0.00 +0.00 654.75 5.19 CBOT soybeans 1386.75 0.25 +0.02 1207.75 14.82 Crude oil 92.95 -0.20 -0.21 98.83 -5.95 Euro/dlr 1.3047 * All grain and oilseed prices for second position. Paris futures
prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.
(Editing by Alison Birrane)