August 12, 2015 / 8:29 PM / 2 years ago

GRAINS-Soy, corn tumble after USDA hikes U.S. yield forecasts

* USDA's surprise hikes in U.S. corn, soy yields stun trade
    * CBOT corn and soybeans briefly fall by daily limits
    * China currency devaluation adds to pressure on soybeans
    * Wheat also down after USDA raises US, world stocks view

 (Updates with closing prices)
    By Julie Ingwersen
    CHICAGO, Aug 12 (Reuters) - U.S. soybean futures plunged 6
percent and both corn and soybeans briefly fell their respective
daily limits on Wednesday after the U.S. Department of
Agriculture surprised traders by raising its estimates for
domestic corn and soybean crops in a monthly report.
    Analysts surveyed by Reuters had expected the USDA to lower
its yield and production forecasts for both crops following
excessive rains in spring and early summer.
    Instead, the government pegged the U.S. corn yield at 168.8
bushels per acre (bpa), up from 166.8 previously and the second
highest on record, if realized. The USDA projected the soybean
yield at 46.9 bpa, up from 46.0 previously. 
    "A shocker, pure and simple; corn and bean yields were
outside of the bell curve of expectations," said Charlie
Sernatinger, an analyst at ED&F Man Capital.
    The USDA raised its 2015/16 corn production forecast to
13.686 billion bushels, the third-largest on record if realized,
and soybean production to 3.916 billion bushels, down 1 percent
from last year's record harvest.
    At the Chicago Board of Trade, new-crop November soybeans
 fell 61-1/2 cents to close at $9.10 per bushel after
dipping to $9.01-1/2, down the contract's daily 70-cent limit.
    New-crop CBOT December corn ended down 19-1/2 cents at
$3.68 a bushel after hitting $3.57-1/2, a life-of-contract low
that was down the product's 30-cent limit.
    Wheat followed the weaker trend after USDA raised its
projections for U.S. and world 2015/16 wheat ending stocks. CBOT
September wheat fell 15 cents to $4.92-1/4 a bushel.
    Soybeans came under pressure ahead of the USDA reports on
news that China again allowed its currency to lose value,
raising concerns about the buying power of the world's top soy
consumer.
    The currency moves were only the latest challenge for U.S.
soy exporters already facing their slowest sales pace in seven
years as huge South American supplies and a strong dollar have
been crimping demand for U.S. shipments for months.
 
    Underscoring the trend, the USDA on Wednesday lowered its
U.S. soybean export forecast for 2015/16 by 50 million bushels.
    "I don't think that is the last reduction we are going to
see there. The United States is not the player in the global
soybean market that we used to be," said Karl Setzer, market
analyst at MaxYield Cooperative in Iowa.
    
    CBOT closing prices:     
                                   Net     Pct  Volume
                 Name     Last  change  change        
 CBOT wheat      Wc1    492.25  -15.00    -2.6  100672
 CBOT corn       Cc2    368.00  -19.50    -4.6  420656
 CBOT soybeans   Sc3    910.50  -61.50    -6.3  276033
 CBOT meal       SMc2   323.70  -18.00    -4.9   35053
 CBOT soyoil     BOc2    29.10   -1.06    -3.5   31793
    CBOT wheat, corn and soybeans in cents per bushel, soymeal
in dollars per short ton and soyoil in cents per lb.

 (Additional reporting by Michael Hogan and Naveen Thukral;
Editing by Marguerita Choy; and Peter Galloway)

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