(New throughout; updates prices, adds quotes, changes byline, changes dateline from previous SINGAPORE/PARIS)
CHICAGO, May 12 (Reuters) - U.S. soybean futures set an 8-1/2-year high on Wednesday after a key U.S. government crop report projected that supplies of the oilseed would remain tight even after the 2021 U.S. harvest.
Soaring CBOT soybean oil futures lent support, with the thinly traded May soyoil contract reaching 72.32 cents per pound, an all-time high on a continuous chart of the spot contract, before paring gains.
Corn and wheat futures fell after the U.S. Department of Agriculture's first official forecasts of stocks left at the end of the 2021/22 marketing year came in above most trade expectations.
Chicago Board of Trade July soybeans settled up 27-3/4 cents at $16.42-1/2 per bushel after reaching $16.67-1/2, the highest in a continuous chart of the most-active contract since September 2012.
Soy futures jumped after the USDA projected U.S. 2021/22 soybean ending stocks at 140 million bushels, roughly in line with trade expectations but up only slightly from the 120 million bushels expected at the end of 2020/21, a seven year low.
"The soybean situation in the U.S. is essentially the tightest that we've ever seen in the stocks-to-use ratio. You could make the argument that the market has been undervalued for the last several months," said Joe Vaclavik, president of Standard Grain, a brokerage.
Soyoil futures rocketed higher on global demand for vegetable oil and soy-based biodiesel fuel.
"We expect strong demand to remain in the market. There is no reason for (soy) crushers to slow down crushing beans. The U.S. is going to need the oil because of this renewable biodiesel industry that seems to be popping up overnight," said Terry Reilly, senior analyst with Futures International.
CBOT July corn settled down 7-1/2 cents at $7.14-3/4 per bushel while the December contract, reflecting the 2021 harvest, tumbled 18-1/4 cents to end at $5.93, pressured by the USDA's stocks projection.
The USDA projected U.S. 2021/22 corn ending stocks at 1.507 billion bushels, up from 1.257 billion expected at the end of 2020/21, and above the average analyst estimate in a Reuters poll for 1.344 billion.
The USDA lowered its estimate of Brazil's 2020/21 corn crop to 102 million tonnes, from 109 million last month, while Brazilian government supply agency Conab lowered its forecast to 106.413 million tonnes, from 108.966 million in April.
(Additional reporting by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore; editing by Rashmi Aich and Cynthia Osterman)
