* USDA pegs U.S. corn, soybean stocks above trade
* Huge USDA world production, stocks outlook pressures wheat
* Attention turns to improving U.S. planting weather
(Updates with closing prices, weekly performance, fund selling
By Karl Plume
CHICAGO, May 10 (Reuters) - U.S. corn futures fell about 2
percent on Friday after the government forecast a record crop
that would bolster U.S. stocks to more than 2 billion bushels at
the end of next season, above trade expectations, despite
reduced yields due to late planting.
Soybean futures slid modestly, halting a three-day rally, as
the U.S. Agriculture Department said a record-large U.S. harvest
would more than double supplies of the oilseed next season after
three straight years of tight supplies.
Wheat prices dropped nearly 3 percent in the steepest drop
in almost four weeks as the USDA forecast global supplies well
above trade expectations and on spillover pressure from sinking
Although grain stocks in the United States remained very
tight, investors were increasingly focusing on the likelihood
that U.S. production would handily recover from the worst U.S.
drought since the 1930s last summer.
"We've certainly got some tightness in old-crop corn and
soybeans, but with each day that passes the market is getting
more comfortable with that," said Brian Basting, analyst at
Advance Trading in Bloomington, Illinois.
"The combination of the USDA numbers and some better
planting weather prospects next week are enough to offset
Thursday's gains," he said.
Drier weather by the weekend into early next week will boost
U.S. corn plantings that have fallen to the slowest pace in
nearly three decades, said John Dee, meteorologist for Global
In its first projection of the fall harvest and 2013/14
balance sheets, USDA said the corn crop would be a record 14.14
billion bushels despite a late start to the planting season that
will lower yields.
U.S. corn ending stocks for 2013/14 would hit 2.004 billion
bushels, USDA said, nearly triple the 759 million forecast for
the Aug. 31 end of this marketing year. The forecast was also
above the trade estimate for 1.993 billion and the highest in
U.S. soybean production was projected at a record 3.390
billion bushels with 2013/14 end stocks more than doubling to
265 million bushels from the 125 million estimated for the end
of this season. The forecast was above trade expectations for
236 million bushels.
"The ending stocks figure is a huge number for corn and a
big number for soybeans, above what the trade was expecting,"
said Brian Hoops, president of Midwest Market Solutions.
"The trade has had a bearish reaction to it. There is
nothing in this report to say it's bullish."
Chicago Board of Trade July corn fell 12-1/2 cents, or
1.9 percent, to $6.36-1/4 a bushel and new-crop December
fell 12 cents, or 2.2 percent, to $5.29-1/2 a bushel. In the
week, the July contract dropped 3.8 percent, the most in five
weeks, and December shed 4.3 percent, the most in six weeks.
CBOT July soybeans fell 9-3/4 cents, or 0.7 percent,
to $13.99 a bushel on Friday but the contract ended up 0.8
percent in the week. New-crop November shed 13-1/2 cents
to settle at $12.05-1/2, a 1.1 percent daily drop and a 1.3
percent weekly decline.
CBOT July wheat futures dropped 19-1/4 cents, or 2.7
percent, to $7.04-1/4 a bushel. The contract was down 2.3
percent on the week, its third drop in the past four weeks.
Wheat was pressured by USDA's larger-than-expected 2013/14
world stocks forecast of 186.38 million tonnes, about 2 million
above pre-report projections, and a massive 45-million-tonne
year-on-year increase in global production amid a rebound in
output from the Black Sea region.
Commodity funds sold a net 11,000 corn contracts on the day,
as well as 5,000 contracts each of soybeans and wheat, trade
Prices at 2:00 p.m. CDT (1900 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 636.25 -12.50 -1.9% -1.6%
CBOT soy 1399.00 -9.75 -0.7% 16.7%
CBOT meal 406.80 -6.70 -1.6% 31.5%
CBOT soyoil 49.23 0.01 0.0% -5.5%
CBOT wheat 704.25 -19.25 -2.7% 7.9%
CBOT rice 1525.00 -9.00 -0.6% 4.4%
EU wheat 208.75 -2.25 -1.1% 3.1%
US crude 95.84 -0.56 -0.6% -3.0%
Dow Jones 15,073 -9 -0.1% 23.4%
Gold 1438.00 -19.70 -1.4% -8.0%
Euro/dollar 1.2981 -0.006 -0.5% 0.3%
Dollar Index 83.1470 0.3540 0.4% 3.7%
Baltic Freight 884 -5 -0.6% -49.1%
(Editing by Peter Galloway and James Dalgleish)