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USDA leaves US corn stocks unchanged, baffling traders

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USDA reports US wheat inventories higher than trade

expectations

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Chinese demand a worry for U.S. soy market

(Updates prices, changed headline, adds quotes, bullets,

changes byline and dateline)

By P.J. Huffstutter

CHICAGO, March 11 (Reuters) - Chicago Board of Trade

corn futures were up for a fifth straight session on Tuesday, as

the federal government left domestic corn inventories unchanged

in a monthly supply-and-demand report - despite strong export

sales and trade tensions with top buyer Mexico.

Soybean futures steadied after a two-day fall, and wheat

remained down after the U.S. Department of Agriculture reported

wheat inventories were above trade expectations, market analysts

said.

"The biggest shock on the U.S. side was wheat stocks going

up, which is bearish, so prices reacted," said Terry Reilly, a

strategist at Marex.

The most-active wheat contract on the Chicago Board of Trade

(CBOT) was down 0.49% at $5.99-3/4 a bushel at 1706 GMT,

while soybeans were up 0.17% at $10.15-3/4 a bushel.

CBOT corn was up 0.58% at $4.74-3/4 a bushel, and

reached the highest price since February 28.

Traders and farmers are keeping a close eye on exports, with

U.S. tariff disputes with major buyers Mexico, Canada and China

threatening sales of U.S. agricultural goods. They said USDA

likely held off on changes as it waits to see whether the U.S.

implements fresh tariffs and how trading partners respond.

Fears that U.S. tariffs will hurt economic growth have

unsettled financial markets, while grain investors are wary that

China may shun U.S. soybeans altogether in favor of a bumper

Brazilian crop.

But some analysts were baffled why USDA kept the U.S. corn

export forecast unchanged on Tuesday.

"We are currently running at 405 million bushels (of corn

exported) above last year's pace, versus the USDA's expectations

of a 158 million bushel increase," said Angie Setzer, partner at

Consus Ag, noting the agency's adjustment for wheat, which has a

smaller gap.

"I get the whole conversation about trade and tariffs and

the unknown," she added. "But if all you can do is predict the

futures based on normal market trends, as they have told me they

do, I'm not sure how they can rationalize not making an

adjustment at this point."

(Additional reporting by Tom Polansek and Heather Schlitz in

Chicago, and Gus Trompiz in Paris and Naveen Thukral in

Singapore; Editing by Alan Barona, Janane Venkatraman, David

Evans and Alison Williams)