GRAINS-Corn and wheat dip, soy firm as USDA report looms

* Grain markets hesitant before USDA data at 1700 GMT
    * USDA widely expected to hike U.S. corn crop, stocks
    * Corn touches new three-year low

 (Updates with U.S. trading, adds new analyst quote, byline,
dateline, pvs PARIS/SYDNEY)
    By Mark Weinraub
    CHICAGO, Nov 8 (Reuters) - U.S. corn and wheat futures
slipped while soybean futures edged higher on Friday ahead of a
key government report updating the size of the U.S. crops and
providing supply and demand estimates, traders said.
    Soybeans were underpinned by strong demand on the export
front. Corn and wheat futures had a weak tone, with corn staking
	
out a fresh three-year low due to expectations for a record harvest. "To say today's report is highly anticipated would be an understatement, almost as much as saying a bearish corn report is expected," Matt Zeller, director of marketing information at INTL FCStone, said in a note to clients. "The trade has had a mind of its own through some of these latest big releases, though, almost never trading the fact - we'll see if that starts to change today." Analysts forecast the USDA will raise its estimate of the 2013 U.S. corn harvest to a record and hike ending stocks to triple their year-earlier level. The report is due at 11 a.m. CST (1700 GMT) The estimates have taken on extra significance after the USDA canceled its October report due to the government shutdown. At 9:55 a.m. CST (1555 GMT), Chicago Board of Trade December corn futures were down 2 cents at $4.18-1/2 a bushel, matching the three-year low hit on Wednesday. Corn has not risen since Oct. 29. With the turnaround in corn supply already well flagged by forecasters, there was talk of a price rebound as investors start covering the record short position they have built up in the futures market.
"Production is going to be revised significantly higher from the September report," said Andrew Woodhouse, grains analyst at Advance Trading Australasia. "If the USDA figures do not meet expectations, the market could correct higher very quickly." CBOT December wheat was down 1-1/4 cents at $6.51-3/4 a bushel, and CBOT January soybeans were 4-1/2 cents higher at $12.71 a bushel. In another sign of swelling global supply, Brazil on Friday raised its official forecasts for its 2013/14 corn and soybean harvests, with soy output seen at a record high. Demand was ramping up to meet the burgeoning supply situation. "For soybeans, a strong pace of demand will keep stocks tight in spite of the increased production prospects," Macquarie analysts said in a note. U.S. ethanol plants shut as long as five years are now coming back online as a record U.S. harvest has pushed down corn prices and improved profit margins for refiners. Prices at 9:55 a.m. CST (1555 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 418.50 -2.00 -0.5% -33.5% CBOT soy 1283.50 4.75 0.4% -7.9% CBOT meal 407.60 3.80 0.9% 10.1% CBOT soyoil 40.28 -0.46 -1.1% -30.2% CBOT wheat 652.25 -0.75 -0.1% -17.9% EU wheat 204.75 1.75 0.9% -18.9% US crude 94.19 -0.01 0.0% 3.1% Dow Jones 15,679 85 0.6% 35.4% Gold 1284.90 -22.65 -1.7% -9.5% Euro/dollar 1.3339 -0.0079 -0.6% -0.1% Dollar Index 81.3630 0.5180 0.6% 3.0% Baltic Freight 1581 -12 -0.8% -10.8%
In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb. (Additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney; Editing by John Wallace)

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