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GRAINS-Corn at 7-month high after USDA shows smaller stockpiles

(Updates U.S. market activity to close)

By Michael Hirtzer

CHICAGO, March 8 (Reuters) - U.S. corn futures jumped 1.6
percent to a seven-month high on Thursday after the Department
of Agriculture showed smaller-than-expected stockpiles in the
wake of increased exports and demand for ethanol, traders said.

Corn prices on a continuous chart notched their
biggest daily gains since December, dragging wheat futures
higher. Soybean futures were narrowly lower following the USDA
data that also predicted larger-than-expected U.S. ending stocks
for wheat and soy, due in part to reduced exports.

Chicago Board of Trade May corn settled up 6-1/4 cents
at $3.93-1/2 per bushel, the contract's highest level since Aug.

"The (corn) exports were eye-popping," said Midwest
Marketing Solutions analyst Brian Hoops. "They jumped 125
million bushels last month and another 175 million bushels this
month. That's a big swing, when exports are running behind last
year's pace."

U.S. corn export sales have spiked so far this year after
dry and hot conditions took a toll on the crop in Argentina, the
No. 3 global corn and soy exporter.

Separate USDA weekly data released at midmorning on Thursday
showed U.S. corn exports last week at 1.9 million tonnes and
soybean sales of 2.7 million tonnes - both above the range of
analyst expectations. Weekly sales of 428,400 tonnes of U.S.
wheat were within the range of estimates.

USDA in its monthly supply and demand outlook cut the
forecast for Argentina corn and soy production but increased its
estimate for soy production in Brazil, the top global soy
producer and exporter.

"Argentine soybeans were at 47 million tonnes," said
MaxYield Cooperative analyst Karl Setzer. "We did cut off 7
million tonnes from February, but according to everybody you
talk to, as long as we hold above 44 million tonnes it's not
going to impact global balance sheets long term because that's
what they need to meet demand."

CBOT May soybean futures finished 1-1/4 cents lower at
$10.64 per bushel, further pressured by forecasts for light
rains in parts of Argentina.

CBOT May wheat was up 2 cents to $4.99-1/4 per bushel
and K.C. May wheat futures down 1 cent at $5.33-1/4, with
some traders taking profits on long K.C. wheat and short CBOT
wheat spreads.

Open interest in CBOT corn futures hit a record of 1,775,602
contracts on Wednesday, surpassing 1,745,258 contracts from Feb.
17, 2011, the CME Group said on Thursday.

Traders said that record could be topped following the
session on Thursday, when investment funds were net buyers of
28,000 corn contracts.

(Additional reporting by Karl Plume in Chicago and Mark
Weinraub in Washington; Editing by Bill Trott and Leslie Adler)

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