GRAINS-U.S. corn down for 3rd session; wheat flat, soy choppy

* Corn retreats after early short-covering rally fizzles

* Buyers wary of further fund long liquidation in corn

* Wheat edges higher on light short-covering

* Soybeans choppy; Brazil logistics eyed

(Recasts with U.S. trading, changes dateline from previous LONDON, changes byline) CHICAGO, April 2 (Reuters) - Corn prices fell for a third straight session on Tuesday after recording their biggest two-decline in at least 50 years, following news last week that U.S. stockpiles were much larger than expected. Wheat and soybeans clung to modest gains, recovering some ground after falling sharply following last Thursday's bearish stocks report issued by the U.S. Department of Agriculture. At the Chicago Board of Trade as of 10:50 a.m. CDT (1550 GMT), May corn was down 3-3/4 cents at $6.38-1/2 per bushel. May wheat was up 4 cents at $6.68 a bushel and May soybeans were up 3/4 cent at $13.91-1/2 a bushel. Corn sagged after an early relief rally fizzled. "Traders are cautious and uncertain whether the fund liquidation that has been pressing the market lower is complete," said Shawn McCambridge, grains analyst with Jefferies Bache in Chicago. "We've nailed this market so hard but could not generate much follow-through buying," McCambridge added. Front-month corn and wheat prices each fell to a nine-month low on Monday while soybeans set a near three-month low as the trade digested USDA's stocks figures. The government on Thursday reported higher-than-expected U.S. stockpiles of all three products. The USDA pegged corn stocks as of March 1 at 5.4 billion bushels, above the average analyst estimate for about 5 billion. The USDA also said farmers would plant the most acres to corn since 1936. The drop in CBOT corn prices during Thursday and Monday totaled 12.6 percent, the biggest two-day decline in data dating back to 1959, said a CME Group spokesman, parent of the CBOT. However, open interest in CBOT corn showed little change since before USDA's report. Open interest rose by more 16,000 contracts, or 1.2 percent, during Thursday's sell-off and fell "That tells me there are some longs hanging in the market," said Ken Smithmier, analyst with the Hightower Report in Chicago. Commodity funds hold a net long position in CBOT corn, leaving the market open to long liquidation. Funds were also net long in soybeans, according to weekly data from the U.S. Commodity Futures Trading Commission, but hold a net short in CBOT wheat, leaving that market open to short-covering. Soybeans drew support from ongoing concerns about logistics in Brazil, where delays in moving the country's likely record-large harvest into export channels have steered some soy export business to the United States. However, the worst delays caused by transport bottlenecks are probably over and the country's shipments are likely to increase in coming weeks, Hamburg-based oilseeds analysts Oil World said on Tuesday.

Prices at 10:57 a.m. CDT (1557 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 637.25 -4.75 -0.8% -8.7% CBOT soy 1390.25 -0.50 0.0% -2.0% CBOT meal 400.50 2.00 0.5% -4.8% CBOT soyoil 49.59 -0.47 -0.9% 0.9% CBOT wheat 666.50 2.50 0.4% -14.3% CBOT rice 1559.00 32.50 2.1% 4.9% EU wheat 236.25 -2.50 -1.1% -5.6%

(Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore; Editing by Alison Birrane and Sofina Mirza-Reid)