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GRAINS-Corn futures extend losses after USDA harvest view; soy rebounds as U.S. delays tariffs

(Updates with closing prices, adds details)

By Mark Weinraub

CHICAGO, Aug 13 (Reuters) - Chicago Board of Trade corn futures sank for the second day in row on Tuesday, dropping 4.1 percent to a three-month low as the U.S. Agriculture Department's unexpected boost to its U.S. production forecast continued to weigh heavily on the market, traders said.

Soybean futures made up most of the ground they lost on Monday on signs of easing tensions in the U.S-China trade fight as well as concerns about dry conditions hindering crop development in the Midwest.

"Corn has followed through on yesterday's limit-down USDA reaction," Matt Zeller, director of market information at INTL FCStone, said in a note to clients. "But soybeans are rebelling on a shaky acreage number going forward and plenty of risk left for 2019 production, especially given a dry outlook through the end of August."

The USDA surprised grain markets on Monday by raising its outlook for this year's U.S. corn production as it reduced its estimate of rain-hit plantings by less than expected while increasing its harvest yield projection.

The most actively traded soft red wheat futures contracts were narrowly mixed on Tuesday after finding technical support near Monday's low while K.C. hard red winter wheat and MGEX spring wheat issues staked out fresh contract lows, also due to bearish government production forecasts.

Chicago Board of Trade November soybean futures ended up 9-3/4 cents at $8.89 a bushel, their fourth day of gains in five sessions.

The Trump Administration will delay imposing a 10% tariff on certain Chinese products, including laptops and cellphones, that had been scheduled to start next month, the Office of the U.S. Trade Representative said on Tuesday.

Chinese Vice Premier Liu He had a telephone conversation with U.S. trade officials, China's Ministry of Commerce said in a statement on Tuesday. Liu spoke with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

CBOT December corn was 16-1/4 cents lower at $3.76-1/2 a bushel, closing just above its session low of $3.76 a bushel. That was the lowest traded price for the most-active contract since May 16.

"The market was shocked by the USDA's estimates of both area and yield," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia. "Getting rid of that extra corn takes a lot more chewing, distilling and shipping than the market was expecting."

CBOT September soft red winter wheat futures were 1/4 cent higher at $4.72 a bushel.

(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Steve Orlofsky and Sandra Maler)

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