WRAPUP 2-US grain stockpiles swell as sales slow

* US wheat, corn stockpiles will be largest in years

* Corn, soy losses to rain and snow smaller than expected

* USDA will report on farmers' crop plans on March 31

* Sugar supply tight, food makers want larger imports (Updates market prices; paragraphs 6-11 new)

By Charles Abbott

WASHINGTON, March 10 (Reuters) - U.S. corn and wheat stockpiles will swell to their largest size in years as corn exports slow and Americans use less flour, the government said on Wednesday in a report likely to influence planting this spring.

Record crops, despite last year's rain, flooding and snow, are still in the marketing stream. The supplies will pull down prices farmer receive at the same time that record soybean exports, forecast at 1.42 billion bushels this marketing year, undergird futures market prices for the oilseed.

In its last update of crop output and use before releasing its crucial planting intentions report at the end of March, the U.S. Agriculture Department cut its forecast for corn exports by 100 million bushels, due to large crops worldwide.

A USDA survey found small losses from the storm-delayed corn harvest -- only 20 million bushels when markets were thinking 60 million bushels or more would be shaved from the production number.

"This will take the wind out of the bullish sails as we head into planting," said analyst Rich Nelson at consulting firm Allendale, pointing to the survey results. [ID:nN10129572]

At the trend-setting Chicago Board of Trade, futures prices for corn for delivery in May CK0 fell 3-1/2 cents on Wednesday, closing at $3.65-1/2 a bushel. May wheat WK0 ended at $4.81-1/2 a bushel, down 8 cents, after hitting a five-month low of $4.78. [ID:nN10161059] [ID:nN10160560]

All told, the corn stockpile will be 1.799 billion bushels when this year's crop is ready for harvest, said USDA -- a seven-week supply, and up 60 million bushels from the previous estimate. The carry-over has topped 1.8 billion bushels only four times in the past 20 years.

Some 1 billion bushels of wheat -- a half-year supply -- will be in U.S. grain bins and warehouses when the new crop is mature, up 20 million bushels from USDA's previous estimate. It would be largest stockpile since the end of 1987/88.

Wheat exports are flagging, and high flour extraction rates reduce the amount of U.S. wheat needed to make food, said USDA. "At the same time, declining per-capita consumption is reducing demand for wheat and flour," it said.

"So now, not only are we not competitive in the world, we're not competitive here in the United States," said Roy Huckabay, an analyst with The Linn Group in Chicago.

The forecast corn and wheat surpluses are larger than estimates by grain traders, who expected wheat stocks at 971 million bushels and corn at 1.72 billion bushels. USDA estimated a soybean carryover of 190 million bushels, a three-week supply. Traders expected 194 million bushels.

"Rising end stocks are not a good thing for the markets," said Randy Mittelstaedt, an analyst with brokerage RJ O'Brien in Chicago. He noted weakening demand for U.S. wheat and corn.

Worldwide, wheat, corn and soybean stockpiles are growing, compared with estimates made in February, said USDA. Brazil, No. 2 to the United States in soybeans, is forecast to reap a record 67 million tonnes, up 1 million tonnes from the previous estimate and 10 million tonnes more than last season.

STAGE SET FOR MAMMOTH CORN, SOYBEAN CROPS

"Right now, the world is waiting for March 31," said USDA chief economist Joe Glauber. For its annual estimate of crop plantings, USDA surveys more than 80,000 growers on their intentions.

"There's no question there is a lot of wheat in the world," said Glauber, but smaller crops are expected this year, and ethanol producers recovering from the recession are forecast to consume more than a third of the corn crop.

Analysts predict U.S. farmers will expand corn plantings by 3 percent, trim soybean plantings slightly and slash wheat sowings by 10 percent. The result would be record-large corn and soybean crops.

The 2009 corn harvest was revised to 13.131 billion bushels, down 20 million bushels, and the soybean crop to 3.359 billion bushels, down 2 million bushels after the survey of eight states with significant harvest delays. Both crops are the largest on record. [ID:nN10127084]

SUGAR, ORANGE JUICE SUPPLIES TIGHT

With foodmakers pressing for an additional 1 million short tons in sugar imports, USDA said sugar supplies remain tight. April 1 is the first day USDA has authority by law to increase the import quota for reasons aside from emergency.

Mexico is the key factor in the import equation because its sugar enters duty-free with no limit on volume. But Mexico has a small crop this year and its shipments to the U.S. market will be down by 60 percent from last year, said USDA.

USDA estimated China's cotton crop at 31.5 million bales, analysts thought the crop would be smaller. Cotton prices CTK0 fell 0.12 cent to 80.21 per lb. [ID:nN10528174]

The government trimmed its estimate of frozen concentrated orange juice production by 2 percent from last month, but raised its forecast for the Florida orange crop by 2 percent. Prices dipped for frozen concentrated orange juice OJK0 at ICE Futures. [ID:nN10408534]

The crop suffered a devastating freeze in January and USDA said the crop is 19 percent smaller than last season. PepsiCo Inc (PEP.N), said on Wednesday it will downsize its Tropicana orange juice cartons in response. [ID:nN10138255] (Additional reporting by Christopher Doering, Jasmin Melvin and Roberta Rampton in Washington; Sam Nelson, Julie Ingwersen, Karl Plume, Christine Stebbins and Michael Hirtzer in Chicago; and Martine Geller in New York; Editing by Alden Bentley)