GRAINS-Wheat extends gains as USDA forecasts tighter U.S. supply

    * Wheat gathers steam from bullish USDA estimates 
    * Corn dips from three-month top on farmer selling 
 
 (adds quotes, updates prices) 
    By Veronica Brown and Naveen Thukral 
    LONDON/SINGAPORE, Feb 11 (Reuters) - Benchmark Chicago wheat 
futures rose for a second consecutive session on Tuesday, with the 
market gaining support after the U.S. Department of Agriculture 
(USDA) reported a larger-than-expected reduction in ending stocks. 
    Corn lost traction after hitting its highest since mid-November 
in the previous session while soybeans also fell, extending 
Monday's losses. 
    The USDA lowered its U.S. wheat ending stocks figure to 558 
million bushels, 50 million below its January estimate and lower 
than trade expectations for 603 million bushels.  
    The cut was entirely due to a 50 million-bushel boost to its 
export forecast. 
    "Although there is nothing like scarcity looming, at least it 
(the supply/demand balance) has come back a bit from the January 
report," said Commerzbank analyst Michaela Kuhl. 
    Chicago Board of Trade March wheat    rose 0.6 percent to 
$5.88-1/4 a bushel by 1132 GMT, adding to Monday's 1.3 percent 
gain. 
    March soybeans    were down 0.3 percent at $13.21-1/4 a 
bushel and March corn    fell 0.1 percent to $4.42-1/2 a bushel. 
    
    The USDA's monthly supply-demand report was bullish for corn as 
well but prices were capped by ample supplies and farmer selling. 
    The report pegged corn ending stocks at 1.481 billion bushels, 
down from its January estimate of 1.631 million. The corn stocks 
figure was less than the average market forecast of 1.619 million 
and below the lowest trade guess of 1.574 million. 
    "Corn export forecast is also well above expectations but the 
market hasn't done much as we still have a comfortable U.S. balance 
sheet," said Brett Cooper, senior manager for markets at FCStone 
Australia. 
    Spot basis bids for corn and soybeans were mostly steady to 
narrowly lower around the U.S. Midwest on Monday as farmers sold 
small portions of each crop when futures notched new highs, grain 
merchants said.    
    The USDA left its outlook for soybean ending stocks unchanged 
at 150 million bushels, slightly above the average trade estimate 
of 143 million bushels. 
    Australia, the world's second-largest exporter, raised its 
forecast for 2013/14 wheat output by 3 percent, as strong 
production in Western Australia state pushed the crop above 27 
million tonnes for only the third time.    
 * Prices as of 1149 GMT 
                                                                    
  Product             Last    Change   Pct Move End 2013 Ytd Pct  
  
  CBOT corn          443.25    0.25   +0.06   422.00    5.04 
  CBOT soy          1321.25   -4.25   -0.32  1312.50    0.67 
  CBOT wheat         587.75    3.00   +0.51   605.25   -2.89 
  Paris wheat      195.00    0.25   +0.13   209.00   -6.70 
  Paris maize      174.25   -0.50   -0.29   171.75    1.46 
  Paris rape       373.00   -1.00   -0.27   366.50    1.77 
  WTI crude oil     100.36    0.30   +0.30    98.42    1.97 
  Euro/dlr            1.37    0.00   +0.15     0.00    0.00 
 * CBOT futures prices are in cents per bushel, Paris futures in 
 euros per tonne, WTI crude oil in dollars per barrel. 
     
     
 
 (Editing by Muralikumar Anantharaman and Jason Neely) 
 ((Tel + 44 207 542 6745)(veronica.brown@thomsonreuters.com)) 
 
Keywords: MARKETS GRAINS/