GRAINS-Soybeans set 6-month low, grains soar on USDA crop data
* Traders expect USDA to raise estimates for soy inventories
* Key reports due at 1700 GMT
* Cold weather threatens wheat in U.S. Plains
(Adds USDA data, latest prices) CHICAGO, Jan 11 (Reuters) - U.S. soybean futures tumbled to their lowest level in more than six months on Friday after the government increased domestic production and inventory estimates more than expected in its hotly anticipated crop reports Corn futures soared to a three-week high and wheat rose to its highest level in more than a week on tighter-than-expected supply projections. The markets gyrated after the U.S. Department of Agriculture issued estimates for global supply and demand, U.S. crop production, quarterly U.S. grain stocks, and U.S. winter wheat seedings. The department raised its estimate for the 2012 U.S. soybean harvest by 1.5 percent from last month to 3.015 billion bushels and its outlook for U.S. soy inventories at the end of the crop's marketing year on Aug. 31 by 3.8 percent to 135 million bushels. Estimated production has crept up since the worst U.S. drought in 56 years sparked worries of major crop losses during the summer. Many traders expect U.S. soybean supplies to swell further in the coming months because of reduced demand. The United States is facing increasing competition for business from Brazil, which is expected to harvest a record crop, and from Argentina. Still, USDA left its estimate for U.S. soybean exports unchanged from last month at 1.345 billion bushels. "Soybeans will deal with big competition from South America," said Don Roose, president of U.S. Commodities. Chicago Board of Trade March soybeans slid 0.5 percent to $13.73-1/2 a bushel by noon CST (1800 GMT), the market's fourth consecutive day of losses. March corn jumped 3.2 percent at $7.21-1/4 per bushel, and March wheat climbed 3.4 percent to $7.69-3/4.
RECORD SOY CROP IN BRAZIL Brazil will harvest a record 82.5 million tonnes of soybeans, larger than traders expected, due to record plantings and improving yield prospects, according to USDA. With a mammoth crop, Brazil would surpass the United States as the world's No 1 soy grower and exporter for the first time. Competition for business is likely to intensify for soybean suppliers in February when the Brazilian crop hits the market. The USDA on Friday said private exporters had struck deals to sell 120,000 tonnes of U.S. soybeans to top importer China.
On Thursday, exporters reported 306,000 tonnes of U.S. and optional-origin soybeans to China for delivery this marketing year and next. On Wednesday, they reported 120,000 tonnes of optional-origin soybeans to China for 2013/14 delivery.
CORN STOCKPILE SURPRISE Corn futures jumped after USDA pegged the U.S. corn stockpile at 8.03 billion bushels as of Dec. 1, 3 percent smaller than expected and the smallest corn carry-out in 17 years. The department estimated a razor-thin 602 million bushels of corn will be on hand when the new crop is ready for harvest by late summer. That would be the smallest carry-out since 1996 and less than a three-week supply. "Quarterly stocks were down quite a bit, implying quite a bit more domestic use than people were expecting," said Jack Scoville, vice president of Price Futures Group. "They're implying some good feed demand across the board." The outlook for wheat inventories at the end of the crop's marketing year on May 31 also was tighter than expected. Farmers face "dismal prospects for a crop next spring and summer" due to a damaging drought and lower-than-expected plantings and said Brian Hoops, president of Midwest Market Solutions. The USDA estimated U.S. winter wheat seedings at 41.82 million acres, 2 percent smaller than expected.
Prices at 11:54 a.m. CST (1754 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 723.00 24.25 3.5% 11.8% CBOT soy 1419.25 1.75 0.1% 18.4% CBOT meal 399.90 -8.80 -2.2% 29.3% CBOT soyoil 49.13 -0.26 -0.5% -5.7% CBOT wheat 770.25 25.75 3.5% 18.0% CBOT rice 1504.50 17.50 1.2% 3.0% EU wheat .00 0.00 0.0% -100.0%US crude 93.24 -0.57 -0.6% -5.7% Dow Jones 13,478 6 0.1% 10.3% Gold 1657.19 -17.45 -1.0% 6.0% Euro/dollar 1.3357 0.0088 0.7% 3.2% Dollar Index 79.4710 -0.2670 -0.3% -0.9% Baltic Freight 760 9 1.2% -56.3%
(Additional reporting by Nigel Hunt in London, Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by William Hardy, Dale Hudson and Bob Burgdorfer)