Oil Report

UPDATE 1-USDA lowers U.S. corn, soybean harvest view by less than expected

(Recasts, updates with analyst comment, price reaction, wheat figures)

CHICAGO, Sept 12 (Reuters) - U.S. corn and soybean production will be 1% smaller than previously forecast this fall, the U.S. Agriculture Department said on Thursday, with both crops still well behind their typical development schedule after late planting.

Corn harvest will be curtailed by low ear count and soybean harvest by low pod count, the government said in its monthly World Agriculture Supply and Demand Estimates and Crop Production reports. But the reduced harvest outlooks still topped the average market forecast.

The market mostly shrugged off the news, with traders saying the only accurate production estimates will come from farmers when they harvest their crops. Farmers across broad swaths of the Midwest planted later than usual this year due to weather problems, casting doubt upon the usually reliable September figures.

“I think that most people in the trade are really coming to the conclusion that until we run combines, it’s going to be really difficult to tell (the size of the U.S. corn and soybean crop,)” said Jim Gerlach, president of brokerage A/C Trading in Indiana. “I think they’re taking a lot of this with a grain of salt.”

Chicago Board of Trade soybean futures, which had rallied sharply throughout the morning on signs of a thaw in the U.S-China trade war, remained near a one-month high. Corn which was trading close to unchanged before the report, firmed.

U.S. corn harvest will total 13.799 billion bushels in the 2019/20 marketing year, down from the previous forecast for 13.901 billion bushels, USDA said. Average corn yields were lowered to 168.2 bushels per acre from 169.5 bushels per acre a month ago.

The government pegged soybean production at 3.633 billion bushels, based on an average yield of 47.9 bushels per acre. That compares with its outlook for 3.680 billion bushels of soybeans, based on an average yield of 48.5 bushels per acre last month.

Analysts had expected corn production of 13.672 billion bushels and soybean production of 3.577 billion bushels, based on an average of estimates given in a Reuters poll. Analysts had expected the report to show corn yields of 167.2 bushels per acre and soybean yields of 47.2 bushels per acre.

USDA also raised its forecast for 2019/20 corn ending stocks to 2.190 billion bushels due to the reduced harvest view as well as a 25 million-bushel cut to ethanol usage. Soy ending stocks were cut by 115 million bushels to 640 million. (Reporting by Mark Weinraub; Editing by Richard Chang)