GRAINS-Prices slide on profit taking ahead of USDA report

(New throughout, updates prices and market activity, adds U.S.
crop-progress data, GASC wheat tender)
* Coming up: USDA to issue updated crop outlook on Thursday
* Expected to cut soy yield 3 pct to 41.2 bushels/acre
* Advancing U.S. corn harvest pressures prices
* Egypt issues international tender to buy wheat

By Tom Polansek
CHICAGO, Sept 9 (Reuters) - U.S. grain and soybean futures
slid on Monday as traders took profits ahead of a government
report that will update the outlook for U.S. harvests.
Soybeans have pulled back 3.7 percent since last week, when

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they approached an 11-month high on concerns that heat and
dryness will damage the nation's crop.
Traders said they had priced in yield losses related to the
weather and were waiting for updated signals about the size of
the autumn harvests from the U.S. Department of Agriculture,
which is set to release a monthly crop production report on
Thursday.
Conditions ratings for the soy and corn crops, in a weekly
USDA report issued on Monday, extended a nearly month-long
decline due to stressful weather.
The good-to-excellent rating for soybeans slipped 2
percentage points to 52 percent, a smaller drop than analysts
expected. Corn ratings fell 2 percentage points to 54 percent
good to excellent, meeting expectations.
There are lingering questions about crop size because corn
and soybeans were planted later than normal in the spring due to

rains, postponing the start of harvest. Uncertainty will persist
beyond Thursday's data release, until the harvest picks up speed
in the heart of the Farm Belt.
"I don't know how important these reports are really going
to be except for a short-term move," said Jack Scoville, vice
president of Price Futures Group.
Chicago Board of Trade November soybeans lost 11-1/4
cents to $13.56-1/2 a bushel, while December corn stumbled
4-3/4 cents to $4.63-1/2. December wheat fell 6-1/2 cents
to $6.41-1/4 a bushel.
Traders are paying close attention to U.S. production
forecasts because large harvests are needed to replenish low
inventories. U.S. soybean supplies were at a nine-year low at
the end of August, while corn supplies hit a 17-year low,
according to USDA data.
The USDA is expected to trim its soybean yield estimate to
41.2 bushels per acre from 42.6 bushels in August, according to

a Reuters poll. Analysts project USDA will cut its estimate for
the average corn yield to 153.7 bushels, down from the 154.4
bushels forecast in August.

DRYNESS PERSISTS
The corn harvest has already started with large yields
reported in southern states, which accounts for a small portion
of the overall U.S. crop, according to traders. The influx of
fresh supplies added pressure to prices, they said.
In Iowa, the top soy- and corn-producing state, high
temperatures and dry weather are "rapidly depleting yield
potential," said Rich Feltes, vice president of research for
brokerage RJ O'Brien.
No widespread rains are expected in dry areas of the Midwest
for the next 10 days, said John Dee, meteorologist for Global
Weather Monitoring.
Soybeans, which are planted after corn in the spring, are
running out of time for rain to improve yields before harvest,
said Jim Gerlach, president of A/C Trading.

"You've got a lot more active harvest pace going on in
corn," he said.
On Tuesday, grain traders will look for the results of a
tender from Egypt's main wheat-buying agency, the General
Authority for Supply Commodities. The agency on Monday issued
its fifth international wheat tender in about two weeks, seeking
to buy an unspecified amount from global suppliers.

Egypt recently has purchased wheat from the Black Sea
region, not the United States.

Prices at 3:50 p.m. CDT (2050 GMT)
LAST NET PCT YTD
CHG CHG CHG
CBOT corn 463.50 -4.75 -1.0% -33.6%
CBOT soy 1356.50 -11.25 -0.8% -4.4%
CBOT meal 465.80 -16.30 -3.4% 10.7%
CBOT soyoil 42.81 -0.55 -1.3% -12.9%
CBOT wheat 641.25 -6.50 -1.0% -17.6%
CBOT rice 1533.00 -12.00 -0.8% 3.2%
EU wheat 187.00 -1.75 -0.9% -25.3%

US crude 109.00 -1.53 -1.4% 18.7%
Dow Jones 15,063 141 0.9% 14.9%
Gold 1386.56 -4.32 -0.3% -17.2%
Euro/dollar 1.3252 0.0073 0.6% 0.4%
Dollar Index 81.8240 -0.3220 -0.4% 2.6%
Baltic Freight 1478 126 9.3% 111.4%

(Additional reporting by Colin Packham in Sydney and Sybille de
La Hamaide in Paris; editing by William Hardy, Jim Marshall,
Phil Berlowitz and David Gregorio)