WRAPUP 1-Mexico corn imports to soar 20 pct amid drought

* Mexico corn imports seen rising 20 pct

* USDA announces big corn sale to Mexico

* Mexico 2009/10 corn crop seen 21-22 mln tonnes

* U.S. corn exports may benefit from Mexico drought

MEXICO CITY, Nov 20 - The worst drought in 68 years in Mexico is expected to boost the country's corn imports 20 percent in the current 2009/10 season, which could benefit grain exporters in the United States.

The drought in parts of the country killed some crops and cattle and forced the government to slow the flow of water to the crowded capital earlier this year.

Carlos Salazar, head of the national corn producers association, told Reuters on Friday that Mexican corn output will likely drop in the 2009/10 harvest cycle to 21 million to 22 million tonnes, from about 24 million tonnes in the previous cycle.

He said Mexican corn imports will rise to 12 million tonnes from about 10 million tonnes in the 2008/09 season.

"We are going to raise imports, approximately by an additional 2 million tonnes," Salazar said in a telephone interview.

Salazar said producers plan to raise output in the 2010/11 cycle to between 25 million and 26 million tonnes.

The bulk of Mexico's harvest is white corn, which is mainly used for food, though Mexico uses excess supply along with yellow corn imports from the United States to feed livestock.

Salazar said imports would probably spike in the first few months of 2010 before a major corn crop in the state of Sinaloa is harvested.

His remarks came shortly after the U.S. Agriculture Department announced a large sale of U.S. corn to Mexico.

The USDA said on Friday private U.S. exporters had reported the sale of 734,000 tonnes of U.S. corn to Mexico. It said 458,750 tonnes were for delivery in the 2009/10 season that began Sept. 1 and the balance in the 2010/11 period.

USDA ANNOUNCES LARGE CORN SALES TO MEXICO

This week alone, the USDA has announced U.S. corn sales to Mexico totaling 943,983 tonnes.

So far in the U.S. 2009/10 season, Mexico has bought a total of 3.18 million tonnes of U.S. corn, of which 1.37 million tonnes have already been delivered.

The sale of corn to Mexico announced on Friday sparked optimism among traders at the Chicago Board of Trade amid a sluggish run of U.S. corn exports due to high prices and stiff competition from cheaper feed wheat across the globe.

"There's been almost no export demand for corn until today with the Mexico news. I want to see if the Mexican sale is a turning point for corn exports ... see if Mexico is a catalyst," said Tim Emslie, research manager for Minnesota-based brokerage house Country Hedging.

CBOT corn futures were slightly lower in mid-day trading on Friday, but underpinned by the sales to Mexico.

"It's a good thing that Mexico popped in because we don't have others. But I'm not sure you can call it a turning point yet," a U.S. corn export trader said.