GRAINS-U.S. corn edges up after tumble, downside risk remains

* Chicago old-crop corn contracts may see more losses

* Rains to soak south Brazil soy harvest and ports

* Crop delays spark concern about tight EU wheat stocks

(Adds quotes, updates prices, previous Singapore)

LONDON, April 2 (Reuters) - Chicago corn futures edged up on Tuesday as the market took a breather after suffering steep losses during the previous two sessions, but the mood remained bearish following news that U.S. stockpiles were much larger than expected.

Wheat and soybeans also rose, recovering some ground after falling sharply following last Thursday's bearish stocks report issued by the U.S. Department of Agriculture.

"The USDA numbers tell us that people might not need to ration old-crop corn and most people will hold the view that there is more downside risk here on old-crop," said Brett Cooper, a senior markets manager at INTL FCStone Australia.

"That is the new paradigm."

May corn futures on the Chicago Board of Trade rose 6-1/2 cents or 1.0 percent to $6.48-3/4 a bushel by 1115 GMT. The contract remains, however, about 12 percent below Thursday's highs set prior to the release of U.S. stocks data.

The USDA surprised the market with forecasts for old-crop corn supplies, estimating the stockpile at the lowest in nine years, that beat the average estimate of the lowest in 15 years.

It pegged corn stocks as of March 1 at 5.399 billion bushels, above the average analyst estimate of 5.013 billion bushels. The USDA also said farmers would plant the highest corn acreage since 1936.

"The high prices in the second half of 2012 noticeably dampened demand, especially for corn used for feed. This has put pressure on prices, particularly for corn from the old harvest," Commerzbank said in a market note on Tuesday.

"Coupled with the expectation, confirmed by the USDA, that this year is set to see the biggest corn acreage since 1936, the inventory data put the market in optimistic mood about the future availability of corn."

EUROPE PREMIUM WIDENS

Wheat prices were also higher with CBOT May soft red winter up 8-1/2 cents or 1.3 percent to $6.72-1/2 a bushel while May milling in Paris climbed 0.25 euros or 0.1 percent to 239.00 euros a tonne.

Dealers noted the premium for old crop prices in Paris stood at around $60 per tonne, widening from about $44 prior to the USDA data.

Dealers said the potential for delayed harvests in western Europe was heightening concern about possible tight end-season stocks and boosting the premium.

"Europe will need to maintain a strong premium to Chicago wheat for the balance of this old crop campaign," said Jaime Nolan-Miralles, commodity risk manager with FCStone Commodity Services (Europe).

Nolan-Miralles also noted recent firm export demand for French and German wheat and the potential for stocks in Europe to fall to critically tight levels ahead of this year's harvest.

"Winter grain development is as much as two weeks delayed across the UK and parts of Northern France, potentially extending the old crop/new crop bridging requirement in Europe," he said.

Soybean futures also rebounded with buyers concerned about the slow pace of harvest and exports from Brazil which is likely to worsen with forecasts of rains.

CBOT May soy rose 0.8 percent to $14.01-1/2 a bushel, still well below last week's pre-USDA high of $14.59-3/4.

Southern Brazil will see rainy weather over the next two weeks, which could cause problems for the harvest and export of a record soy crop through the country's congested ports, local forecaster Somar said.

The slow pace of exporting Brazilian soy and corn has prompted China to switch some orders to the United States and cancel or push back shipments from Brazil until later in the year.

(Additional reporting by Naveen Thukral in Singapore; Editing by Alison Birrane)