* More traders will be in place for 11 a.m. CST release
* Volatile dealings often come with January report
By Mark Weinraub
CHICAGO, Jan 10 (Reuters) - The U.S. Agriculture Department's inaugural midday release of monthly crop data on Friday could result in heavier-than-usual midday trading in Chicago grain markets as more investors will be at the ready when the data goes public, traders said.
The USDA, which has been issuing its monthly reports at 7:30 a.m. CST (1330 GMT) for nearly two decades, decided last year to push back the release to 11 a.m. CST (1700 GMT) when trading at the Chicago Board of Trade grain markets is usually in full swing.
"I actually think it will be a lot better," said Justin Lewis, vice president of KIS Futures in Oklahoma. "It will allow the entire country to participate a lot more actively."
Following the last two monthly crop reports, 14 percent of the entire day's trading in the most active CBOT corn, soybean and wheat contracts had been condensed into the 30 minutes after the release of the data, according to Reuters data.
The pop in volume could be even bigger on Friday after the report hits at 11 a.m. CST, as more traders from coast to coast will be ready to make moves. However, volumes are expected to be almost nonexistent in the hours heading up to the report.
Traders have had some practice dealing with reports released when the market is open as the Chicago Board of Trade had switched to 21-hour trading sessions in May. Since then, there has been a surge in volume immediately following reports, market activity would then cool before heating up again at 9:30 a.m. central, the traditional opening time for trading in the CBOT's iconic pits.
Before CBOT's extended hours, traders had two hours to process the USDA data and formulate strategies before the market opened.
The report on Friday will provide USDA's final estimate of the 2012/13 U.S. corn and soybean crops as well as 2013/14 wheat plantings and estimates of how big domestic grain supplies were when harvest ended last fall.
The U.S. government's January report is one of the most anticipated of the year and the market often swings violently following its release. Corn prices have moved their daily trading limit in the session after the report hits the market five out of the last six times.
Volumes have been light so far this week as many traders already have placed their bets on what direction they think the market will move after the release.
"Watching the grains markets feels a bit like waiting for the closing bell back in high school the past few days as the January USDA report approaches everyone just stares at the clock waiting," Robert Chesler, vice president and head of the food service division at INTL-FCStone said in a note.
CBOT corn averaged just 218,885 contracts a day during the first three days of this week, 24 percent lower than its daily average during 2012. Soybean volume averaged 149,919 contracts a day this week, down 27 percent from 2012, and wheat averaged 90,933 trades a day so far this week, 16 percent lower than a typical day in 2012.
Investors were reluctant to stake out new positions ahead of the much anticipated report, which should provide fresh direction to the grain markets and provide plenty of information for traders to chew through.
"By the time we get to Friday morning, most of the actual position squaring should be behind us," said Bill Gentry, a broker with Risk Management Commodities in Lafayette, Indiana. "This market has been looking for headlines for months."