(Adds analyst comments, updates prices)
By Ros Krasny
WASHINGTON Feb 10 Projected U.S. corn ending stocks for 2013/14 continue to tighten on strong export demand, the U.S. Agricultural Department said on Monday, a bullish jolt that helped Chicago corn futures reach their highest levels in four months.
U.S. wheat carryout was also lower on the month on rising exports. Projected U.S. soybean ending stocks were unchanged from January but Brazil's crop and projected exports were raised, giving the report a bearish edge.
Chicago corn futures rose about 1 percent on the news before hitting a wall of resistance near $4.50 per bushel, while wheat futures jumped about 1.5 percent and soybean futures slipped by about 0.5 percent.
"Demand is starting to shine through," Mike Zuzolo, Global Commodity Analytics, said of the corn and wheat data.
The USDA forecast 1.481 billion bushels of corn will remain on hand when the new crop is ready for harvest by late summer, well above the drought-affected level of 2012/13 but down from 1.631 billion projected in January and a second consecutive substantial monthly reduction.
"The once-feared carryout of over 2 billion bushel carryout is now under 1.5 billion bushels," said Don Roose, analyst with U.S. Commodities.
Grain traders and analysts had forecast corn stocks at an average of 1.619 billion bushels.
On the back of a 150-million-bushel hike in U.S. corn exports, the stocks-to-use ratio for 2013/14 will be 11.1 percent, the USDA said, down from 12.4 percent forecast in January and 13.7 percent in December.
In general, the lower the ratio, the higher the potential for prices to climb and the less margin for error for the upcoming growing season.
"The 150 million bushel corn export adjustment higher was surprising. I think most people were looking for maybe 50 million," said Jim Gerlach with A/C Trading.
The agency raised its forecast for the average farm price of U.S. corn by 10 cents per bushel, to $4.50.
Rich Nelson, analyst at Allendale Inc., said the price impact of the lower stocks was limited because some traders think USDA's estimate of feed demand, up 22 percent on the year at 5.3 billion bushels, is too high.
"We know it will be reduced; we just don't know when," Nelson said.
USDA trimmed its forecast of 2013/14 corn production outside of the United States and said that "reduced foreign export prospects also lower competition for U.S. corn in the world market."
The agency cut Argentina's projected corn crop and exports by 1 million tonnes. Projected corn imports were raised for the European Union, Egypt, South Korea, Mexico and Vietnam.
U.S. wheat carryout for 2013/14 reversed an increase from a month ago, falling to a projected 558 million bushels from 608 million. Reductions in stocks were spread among the major classes of U.s. wheat. The average trade forecast was 603 million bushels.
"A reduction in expected exports from Australia during the July-June world trade year also raises prospects for 2013/14 U.S shipments," USDA said.
USDA left the bottom line for U.S. soybeans - projected 2013/14 U.S. ending stocks - at 150 million bushels for a third straight month.
"We're sitting on a minimal pipeline level for soybeans so to see the USDA not do anything to the ending stocks is not really that surprising," said Karl Setzer of MaxYield Co-op.
U.S. exports for 2013/14 were raised by 15 million bushels, offset by higher imports and lower residual usage. The average season farm price for soybeans was raised by 20 cents per bushel, to $12.70.
"We may have seen our last bullish (soybean) input for a while - it's been at least a week since we've heard about Chinese demand," said Jack Scoville, analyst at the Price Futures Group.
Citing early harvest results in the center-west region, Brazil's soybean crop was estimated at a record high 90 million tonnes.
That pushed the South American powerhouse past the United States, with a crop of 89.5 million tonnes, as the world's largest soybean grower. Argentina's soybean crop was lowered by 500,000 tonnes, to 54.0 million.
Globally, U.S. corn carryout was cut to 157.3 million tonnes from 160.2 million, and wheat stocks were trimmed to 183.7 million from 185.4 million. World soybean stocks edged higher, to 73.0 million tonnes. (Additional reporting by Mark Weinraub, Julie Ingwersen, Chris Stebbins, Michael Hirtzer and Tom Polansek in Chicago; Editing by Stephen Powell)