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GRAINS-Soy hits 3-1/2 week high on export demand; USDA data awaited

(Updates prices, adds quotes, changes byline, changes dateline from previous PARIS/SINGAPORE) By Julie Ingwersen CHICAGO, May 11 (Reuters) - U.S. soybean futures firmed on Monday, reaching a 3-1/2 week high on talk of fresh export sales to top global soy buyer China and fears of possible crop damage following a frosty weekend in the Midwest crop belt, traders said. Corn and wheat futures drifted lower as traders adjusted positions a day ahead of a monthly supply/demand report from the U.S. Department of Agriculture in which analysts expect the government to project ballooning U.S. corn inventories in the coming crop year. As of 1:12 p.m. CDT (1812 GMT), Chicago Board of Trade July soybean futures were up 4-3/4 cents at $8.55-1/4 per bushel, after reaching $8.61-1/4, the contract's highest since April 15. CBOT July corn was down 3/4 cent at $3.18-1/2 a bushel and July wheat was down 4 cents at $5.18 a bushel. Soybeans rose on weather worries and optimism about fresh export demand. Chinese importers bought at least four cargoes, or about 240,000 tonnes, of U.S. soybeans, export traders said Monday. "Soybeans and corn prices are supported by expectations of more Chinese buying after talks between Washington and Beijing," said Ole Houe, director of advisory services at brokerage IKON Commodities. China has stepped up purchases of U.S. grain in recent weeks, booking 378,000 tonnes of soybeans and 686,000 tonnes of corn last week, the USDA confirmed. Farmers were still assessing whether a weekend freeze in the northern and eastern Midwest affected newly planted corn and soybean crops. Analysts surveyed by Reuters expected the USDA's weekly crop progress report to show that U.S. farmers had seeded 71% of their corn and 42% of soybean acres by Sunday. The frost may have impacted 5% to 10% of early planted corn and 15% of the developing U.S. winter wheat crop in the eastern Midwest and Ohio River Valley, the Commodity Weather Group said in a note to clients. Traders were also looking ahead to Tuesday's USDA May supply/demand report, in which the government will release its first official forecasts for the 2020/21 marketing year covering crops currently being seeded. Analysts surveyed by Reuters on average expect the USDA to project U.S. corn stockpiles to reach nearly 3.4 billion bushels by the end of the 2020/21 marketing year, on Aug. 31, 2021, up from about 2.2 billion at the end of 2019/20. Those expectations hung over the corn futures market, overshadowing bullish weekly export data. The USDA reported export inspections of U.S. corn in the latest week at 1,334,686 tonnes, topping a range of trade expectations. CBOT prices as of 1:12 p.m. CDT (1312 GMT): Net Pct Volume Last change change CBOT wheat WN0 518.25 -3.75 -0.7 41138 CBOT corn CN0 318.75 -0.50 -0.2 73709 CBOT soybeans SN0 855.00 4.50 0.5 82019 CBOT soymeal SMN0 290.70 -0.10 0.0 33999 CBOT soyoil BON0 26.45 -0.09 -0.3 35051 NOTE: CBOT July wheat, corn and soybeans shown in cents per bushel, soymeal in dollars per short ton and soyoil in cents per pound. (Reporting by Julie Ingwersen Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by David Evans and Lisa Shumaker)

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