GRAINS-Rising global supply, technical selling hit grain prices

* March corn, wheat contracts set new contract lows
    * Weekly U.S. corn, soy export sales fall short of estimates
    * Traders await USDA crop reports due out on Friday

 (Updates with U.S. trading, changes dateline from
    By Tom Polansek
    CHICAGO, Jan 9 (Reuters) - U.S. corn and wheat futures hit
fresh contract lows on Thursday on weak export demand and
technical selling ahead of U.S. crop reports that are expected
to raise supply estimates.
    Soybean futures rose, with a firm cash market and Chinese
buying helping to offset pressure from rising production
prospects worldwide, traders said. After good harvests across the northern hemisphere last year, global grain supply is expected to be further replenished by bumper crops in major southern hemisphere producers in early 2014. In closely watched estimates to be released at 11 a.m. CST (1700 GMT) on Friday, the U.S. Department of Agriculture is expected to increase world corn and soybean inventories, according to a Reuters poll of analysts. The USDA also is expected to increase its estimates for the most recent U.S. corn and soybean harvests. "The only good thing that can be said about the corn market is that just maybe some of the potential bearishness in the report tomorrow is already being factored in to the price," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage. March wheat on the Chicago Board of Trade was down 5-1/4 cents to $5.83-1/2 a bushel by 9:40 a.m. CST (1540 GMT) and set a new low of $5.82. It was the lowest price for a front-month wheat contract since December 2011. March corn fell 5-3/4 cents to $4.11-1/4 a bushel and set a contract low of $4.10-1/2 a bushel. It was the lowest price for a front-month corn contract since early December 2013.
March soybeans rose 5-1/4 cents to $12.74-1/2 a bushel. SLUGGISH EXPORT SALES Sentiment in the wheat market has been dampened by sluggish U.S. exports at a time of ample global supply, and news that Indian traders have sealed a first export deal for the new season wheat illustrated overseas competition. U.S. wheat export sales of 294,800 tonnes for the week ended Jan. 2 were toward the low end of expectations for 200,000 to 500,000 tonnes. "There are still ideas that more U.S. export business will be done soon, but last week's export sales were again disappointing," said Sterling Smith, futures specialist for Citigroup. Weekly U.S. corn export sales of 155,200 tonnes were below expectations for 200,000 to 700,000 tonnes, and weekly soybean export sales of 156,200 tonnes missed estimates for 450,000 to 950,000 tonnes. CHINA BUYS SOYBEANS Still, soybean futures felt a boost after USDA on Thursday reported that private exporters had struck deals to sell 110,000 tonnes of U.S. soybeans to China for the 2014/15 marketing year, which starts on Sept. 1. The USDA reported sales of 115,000 tonnes of U.S. soybeans sold to China on Wednesday and 350,000 tonnes on Tuesday. China is the world's top soybean importer.
The sales surprised some traders, who had been expecting that China would cancel purchases of U.S. soybeans in favor of purchases of South American soybeans. In Brazil, the 2013/14 soybean crop may easily exceed 95 million tonnes, Agriculture Minister Antonio Andrade said on Thursday, surpassing crop supply agency Conab's official estimate of record output of 90.33 million tonnes. Prices at 9:39 a.m. CST (1539 GMT) LAST NET PCT YTD CHG CHG CHG CBOT corn 411.00 -6.00 -1.4% -2.6% CBOT soy 1273.75 4.50 0.4% -3.0% CBOT meal 433.50 2.90 0.7% -1.0% CBOT soyoil 37.48 0.05 0.1% -3.5% CBOT wheat 583.75 -5.00 -0.9% -3.6% CBOT rice .00 0.00 0.0% -100.0% EU wheat 201.00 -3.00 -1.5% -3.8% US crude 92.34 0.01 0.0% -6.2% Dow Jones 16,443 -19 -0.1% -0.8% Gold 1226.90 1.19 0.1% 1.8% Euro/dollar 1.3591 0.0017 0.1% -0.4% Dollar Index 81.0050 -0.0170 0.0% 1.2% Baltic Freight 1706 -120 -6.6% -25.1% (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by David Evans and Marguerita Choy)

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