SOY, GRAINS FIRM AHEAD OF USDA REPORTS

• Soy rises 1.3 pct, corn up 0.2 pct, wheat ticks up
• USDA seen forecasting soy crop at 2.764 bln bushels
• Tight supplies, Australian crop woes support wheat
• Coming up: USDA supply-demand report at 1230 GMT

Chicago soybeans rose more than 1 percent on Thursday, recovering from a one-week low hit the day before, while corn gained after marking its lowest in almost two weeks as traders adjusted positions ahead of a key supply-demand
report.

Wheat futures edged higher, rising for a fourth consecutive session on mounting concerns about supplies from top exporters Australia, Russia and France.

"This is a kind of positioning ahead of the USDA report and some bargain-hunting," said an investment analyst in the Far East, referring to the U.S. Department of Agriculture report due at 1330 BST.

"The market is recovering from lows as the long-term fundamental outlook is bullish."

Still, soybeans remain on track for a fourth straight week of decline due to pressure from the rapid pace of harvest for the crop, which is expected to be bigger than previously forecast.

The USDA report is likely to estimate the soybean crop at 2.764 billion bushels, based on the average forecast in a survey of 26 analysts. The average yield was seen at 37.006 bushels per acre, up 4.8 percent from a month ago.

The monthly supply-demand report is expected to show this year's U.S. corn harvest was the smallest in six years and that corn supplies could dwindle to 17-year lows by the end of next summer due to crop losses from the worst drought in over 50 years.

Chicago Board of Trade December November soy had risen 1.3 percent to $15.43-1/4 a bushel by 0241 GMT after dropping to its lowest since October 3 on Wednesday. Corn gained 0.2 percent to $7.38-1/2 a bushel, while December wheat added 0.1 percent to $8.70-3/4 a bushel.

NEAR-RECORD HARVEST PACE

The USDA has put progress on the soybean harvest at just below the record pace of 2010, while anecdotal yield reports are higher in much of the U.S. Midwest growing region.

As a result, soybean spot basis bids eased at processors in Iowa and Indiana early on Wednesday as the fast harvest replenished crushing supplies at plants.

In Cedar Rapids , Iowa, bids fell 10 cents to 50 cents per bushel below benchmark CBOT November soy futures, the lowest basis since October 2008. Bids declined 7 cents in Decatur, Indiana.

A Chicago-based commodity research and brokerage firm, on Tuesday, said it raised its production and yield estimates for the 2012 U.S. corn and soybean crops.

The firm estimated the U.S. soybean yield at 38.0 bushels per acre (bpa) and production at 2.819 billion bushels, surpassing the USDA's current estimates for a soybean crop of 2.634 billion bushels with an average yield of 35.3
bpa.

The wheat market was buoyed by dryness threatening yields in Australia, the world's second largest supplier, and shrinking supplies in France.

France cut its forecast of soft wheat stocks at the end of this season to the lowest level in at least 13 years as it raised its export outlook. Farm office FranceAgriMer expects soft wheat ending stocks in 2012/13 at 1.8 million tonnes, down around 600,000 tonnes from its estimate last month.

Russia, the world's No. 4 exporter, is also facing tight supplies from the drought-hit crop, but President Vladimir Putin on Wednesday dispelled any speculation that the country would impose would impose feared grain price restrictions. Russia is likely to cut its grain crop to 71 million tonnes this year, including 40 million tonnes of wheat, after hot and dry weather slashed yields by a quarter. Russia harvested 94 million tonnes of grain last year.

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