GRAINS-U.S. corn, soybeans drop ahead of USDA report

* Wheat firms; Egypt tender eyed

* Corn down 1.4 percent, soybeans down 1.3 percent (Updates with European trading; changes byline, dateline, previous PARIS/SINGAPORE)

By Mark Weinraub

CHICAGO, Oct 10 (Reuters) – U.S. corn and soybean futures fell sharply on Friday as investors staked out positions ahead of a key government report that was expected to boost already record forecasts for the U.S. harvests of both crops, traders said.

Wheat futures were slightly firmer, stabilizing after falling nearly 3 percent on Thursday. Signs of strong global demand lent support to wheat prices.

But the market was mostly focused on the upcoming government reports. The U.S. Agriculture Department will release its monthly supply and demand reports, as well as crop production forecasts, at 11 a.m. CDT (1600 GMT).

“The day has arrived, and the trade is clearly fearful of a bearish report,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients.

Chicago Board of Trade corn for December delivery was down 5-1/4 cents at $3.39-1/2 a bushel at 9:45 a.m. CDT (1445 GMT). CBOT November soybeans were 12-1/4 cents lower at $9.29-3/4 a bushel.

Investors shrugged off the harvest delays, and forecasts for more rain in southern areas of the U.S. Midwest, that have provided some support to prices over the past week.

Despite the recent delays, the huge harvest was expected to quickly replenish tightness in the supply chain in the coming weeks.

“While the slow pace of harvest helped ease hedge pressure a bit, traders mostly expect another increase in production from USDA this morning,” Bryce Knorr, senior editor at Farm Futures Magazine, said in a note. “While the overall outlook from USDA may not grow much more bearish today, a huge crop still threatens burdensome supplies.”

CBOT December wheat was 1-3/4 cents higher at $4.95 a bushel.

A wheat tender on Friday by Egypt, the world’s top importer of the cereal, is being watched as a test of U.S. price competitiveness against western European and Black Sea origins.

The tender could see Russian wheat back into contention after missing out in the most recent Egyptian tenders, following a three-week drop in Russian prices, traders said. Name

Last

Pct Change Net Change Pvs Close CORN DEC4

340

-1.38

-4.75

344.75 SOYBEANS NOV4

929.5

-1.33

-12.5

942 SOY MEAL OCT4

337.4

1.32

4.4

333 SOYBEAN OIL OCT4

32.88

0

0

32.88 WHEAT SRW DEC4

495

0.35

1.75

493.25 ROUGH RICE NOV4

12.58

-0.12

-0.015

12.595 M.WHEAT EUR JAN5

159.75

-0.62

-1

160.75 LIGHT CRUDE NOV4

85.01

-0.89

-0.76

85.77 DJ INDU AVERAGE

16651.5

-0.05

-7.75 16659.25 GOLD

1220.65 #N/A

-3.1

1223.75 BALTIC EXCH DRY

963

-1.13

-11

974 US DOLLAR INDEX

85.958

0.51

0.436

85.522 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 Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by Peter Galloway)

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