* Corn falls as USDA sees production at fresh high
* Wheat firms as USDA pegs supply below market estimates
* Soybeans firm after sharp 2 percent drop on Friday
By Colin Packham
SYDNEY, Oct 13 (Reuters) – Chicago corn dropped on Monday, stretching its losses into a second straight session after a report from the U.S. Department of Agriculture (USDA) showed the country’s output of the grain was set to exceed the already-forecast record high levels.
Wheat edged up as the USDA pegged supplies below market expectations, while soybeans firmed after a sharp 2 percent drop in the previous session.
Chicago Board of Trade front-month corn futures fell 0.3 percent to $3.33 a bushel by 0143 GMT, having slumped 1 percent earlier in the session. Corn fell more than 3 percent on Friday, the biggest one-day fall since Sept. 3.
“That corn crop continues to get bigger and bigger,” said Graydon Chong, senior grains analyst, Rabobank. “There is also expectations that the crop could get bigger, and we expect to see yields get bigger as we get into the harvest.”
USDA pegged the 2014/15 corn crop at 14.475 billion bushels, up from its September forecast of 14.395 billion. However, the market had expected the USDA to peg production at 14.506 billion bushels.
The government also raised its average yield outlook to 174.2 bushels per acre from 171.7 bushels.
Overall corn yields will be a record 174.2 bushels per acre, with 22 states expected to post new yield marks.
Front-month soybeans rose 0.5 percent to $9.27 a bushel, retaining most of Friday’s losses of 2.1 percent.
USDA estimated the U.S. soybean crop at a record 3.927 billion bushels, up 17 percent from the recently revised 2013 crop but below trade expectations averaging 3.976 billion.
Front-month wheat rose 0.2 percent to $4.99-1/2 a bushel, having closed up 1.1 percent in the previous session.
USDA lowered its 2014/15 world wheat ending stocks forecast to 192.6 million tonnes, despite somewhat larger crops in the EU, Pakistan and Ukraine.
Grains prices at 0143 GMT Contract
Change Pct chg Two-day chg MA 30 RSI CBOT wheat
499.76 57 CBOT corn
363.92 50 CBOT soy
958.79 42 CBOT rice
$12.58 -$0.01 -0.04%
$12.61 44 WTI crude
$84.96 -$0.86 -1.00%
$91.36 18 Currencies
$1.267 $0.005 +0.36%
-0.69% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential (Editing by Himani Sarkar)