GRAINS-Corn, wheat higher ahead of USDA report; soybeans mixed

* Corn up 1 pct, wheat up 1.2 pct on position squaring

* Nearby soy holds on tight stocks, deferred contracts lower

* Coming up: USDA monthly supply-and-demand report 1700 GMT

(Recasts, adds quote, updates prices, changes dateline from LONDON/SYDNEY, changes byline) CHICAGO, Feb 8 (Reuters) - U.S. corn and wheat futures firmed on Friday as investors squared positions ahead of a monthly government supply and demand report later in the day. Soybeans were narrowly mixed, with nearby contracts holding gains amid tight supplies and persistent demand while deferred prices fell on expectations for large crops in both the United States and South America. "We've been on a selloff in corn so there's some consolidation ahead of the report. Soybeans are up for the week so we don't have the same kind of evening at work as with the corn," said Tim Emslie, research manager at CHS Hedging Inc. "Wheat exporters have had a good week of sales, which we'll see in next week's report, so that's a bit supportive in wheat." Chicago Board of Trade March corn gained 7 cents, or 1 percent, to $7.17-3/4 a bushel by 9:52 a.m. CDT (1552 GMT) after falling for five straight sessions. The contract was poised for its second weekly decline in three weeks. CBOT March wheat rose 9 cents, or 1.2 percent, to $7.65 a bushel, nearly unchanged for the week after falling in each of the past two weeks. March soybeans were 1-1/2 cents higher at $14.88-1/4 per bushel while new-crop November soybeans fell 8-1/4 cents, or 0.6 percent, to $13.15-3/4 a bushel. The spot contract was set for a fifth straight weekly gain.

USDA REPORT EYED Corn has been weighed down this week by expectations for larger U.S. end-of-season stocks. Traders and analysts expect that the USDA will raise its forecast for U.S. corn ending stocks amid slumping demand from exporters and ethanol makers, although the stockpile is likely to remain at a 17-year low. "We're not really expecting much. Given the level of uncertainty that still exists in South America the USDA are going to make relatively conservative changes to the U.S. balance sheet, for both corn and soybeans," said Chris Gadd, grains analyst at Macquarie. "Our main expectation is for the USDA to lower US Hard Red Winter wheat exports, they may offset this with increased U.S. feed demand. We certainly aren't expecting the fireworks that we saw in the January report." Corn was also weighed down by sluggish export demand. The USDA said on Thursday that corn export sales continued their months-long slump, dipping to a one-month low of a net 160,400 tonnes, just a fifth of sales in the same week last year. The USDA last month forecast U.S. corn exports in the current marketing year at 950 million bushels, a 41-year low, but many traders and analysts expect that outlook to shrink further, possibly on Friday. Traders remain cautious over the soybean supply as dry weather has damaged crop prospects in Argentina, but forecasts for wet weather next week could revive some of the crop. Still, analysts expect the USDA to lower its soybean production outlook. Analysts expect the USDA to lower its soybean production outlook. Despite some forecasts for wet weather in the next few days, Argentina's 2012/13 soy harvest is seen at 50 million tonnes, missing expectations due to dry weather, the Buenos Aires Grains Exchange said on Thursday in its first output forecast.

But Brazil will produce a record 83.4 million tonnes of soybeans this season due to an unprecedented expansion in planted area, the government said, raising its forecast 0.8 percent from 82.7 million tonnes in January.

Prices at 10:00 a.m. CST (1600 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 717.50 6.75 1.0% 2.8% CBOT soy 1486.25 -0.50 0.0% 4.8% CBOT meal 437.20 -0.40 -0.1% 3.9% CBOT soyoil 51.81 -0.04 -0.1% 5.4% CBOT wheat 765.25 9.25 1.2% -1.6% CBOT rice 1625.00 13.00 0.8% 9.4% EU wheat 247.25 2.25 0.9% -1.2%US crude 96.27 0.44 0.5% 4.8% Dow Jones 14,003 59 0.4% 6.9% Gold 1668.65 -2.04 -0.1% -0.3% Euro/dollar 1.3379 -0.0017 -0.1% 1.4% Dollar Index 80.1330 -0.0590 -0.1% 0.5% Baltic Freight 748 -1 -0.1% 7.0%

(Additional reporting by Natalie Huet in London, Colin Packham in Sydney; Editing by William Hardy and Jim Marshall)