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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
	
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)

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