GRAINS-Soy, wheat rise on exports, positioning before U.S. report

* Traders even up positions before USDA supply report

* Weekly U.S. wheat, soy export sales top estimates

* FAO latest forecaster to see bigger global wheat crop

(Recasts with soaring soybeans, updates prices) CHICAGO, March 7 (Reuters) - U.S. soybean futures jumped on Thursday on better-than-expected weekly exports and expectations the government will tighten its supply outlook in a monthly crop report. Traders were buying back previously sold positions amid expectations the U.S. Department of Agriculture, in a report on Friday, will cut its estimate for U.S. inventories and its forecast for South American harvests. "The shorts don't really want to be in the market going into the March report," said Mike Zuzolo, president of Global Commodity Analytics & Consulting. Chicago Board of Trade March soybeans climbed 1.1 percent to $15.01 a bushel by 1 p.m. CST (1900 GMT). May soybeans gained 0.4 percent to $14.72-1/2 a bushel. Traders were evening up positions in wheat the day after the most-active contract sustained its biggest one-day drop in nearly four months. CBOT May wheat rose 0.7 percent to $6.88-1/4 a bushel, having closed down 3.2 percent on Wednesday. March wheat was up 0.2 percent at $6.77-3/4 after falling to its lowest level in more than eight months in earlier trading. Corn stabilized the day after it recorded its biggest daily loss in almost six months. May corn was down 0.4 percent to $6.86 a bushel, having dropped 2.9 percent on Wednesday. "We regard the rapid fall in wheat and corn prices as excessive and fundamentally unjustified," Commerzbank said in a note. "Tomorrow's USDA estimates are likely to show that available supply is still tight."

BRAZIL CUTS SOY HARVEST Analysts polled by Reuters expect the USDA, in its crop report, to increase estimates for U.S. wheat and corn supplies slightly from last month and trim its outlook for soybean supplies. Traders remain nervous about low old-crop supplies of soybeans as logistical shipping problems in Brazil has shifted global buyers from there to the United States. Brazil's government on Thursday cut 1.6 percent off its forecast for the 2012/13 soybean crop, citing unfavorable weather. However, farmers are still expected to produce a record crop. A large Brazilian harvest is needed to replenish global stocks after drought hurt crops there and in the United States last season. "Tight old-crop supplies should be enough to keep prices supported," said Kayla Burkhart, a broker for SunPrairie Grain.

EXPORT BOOM Larger-than-expected exports helped underpin wheat and soy prices, according to analysts. Weekly U.S. wheat export sales of 828,100 tonnes topped expectations of 350,000 to 550,000 tonnes, while weekly soybean export sales of almost 1.4 million tonnes beat estimates for 900,000 to 1.25 million tonnes. Corn sales of 156,600 tonnes missed estimates for 450,000 to 650,000 tonnes. Yet, improving weather conditions continue to hang over the grain markets. The United Nations' Food and Agriculture Organization on Thursday estimated that world wheat production would rise 4 percent in 2013 to 690 million tonnes. The increase is expected due in part to expanded wheat planting in Europe and a recovery in yields in Russia and other countries. Wheat prices tumbled on Wednesday as beneficial precipitation improved the U.S. harvest outlook.

Prices at 1:01 p.m. CST (1901 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 685.75 -2.75 -0.4% -1.8% CBOT soy 1471.50 5.50 0.4% 3.7% CBOT meal 435.10 0.90 0.2% 3.4% CBOT soyoil 50.40 0.34 0.7% 2.5% CBOT wheat 687.75 4.00 0.6% -11.6% CBOT rice .00 0.00 0.0% -100.0% EU wheat 238.75 -2.50 -1.0% -4.6%US crude 91.52 1.09 1.2% -0.3% Dow Jones 14,331 35 0.2% 9.3% Gold 1577.11 -6.20 -0.4% -5.8% Euro/dollar 1.3112 0.0147 1.1% -0.6% Dollar Index 82.0600 -0.3990 -0.5% 2.9% Baltic Freight 834 14 1.7% 19.3%

(Editing by David Gregorio and Bob Burgdorfer)