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GRAINS-Soy, corn futures hit June highs after U.S. cuts harvest estimates

(Adds USDA crop-progress data, closing prices)

By Tom Polansek

CHICAGO, Sept 12 (Reuters) - Chicago Board of Trade soybean futures surged to their highest price since June on Monday and closed near their highs after the U.S. government made bigger-than-expected cuts to its domestic harvest estimate.

Corn futures also hit their highest price in more than two months following a reduced production outlook from the U.S. Department of Agriculture.

The agency, in a monthly report, pegged the U.S. soy harvest at 4.378 billion bushels, below analysts' estimates for 4.496 billion bushels. In August, the USDA estimated the harvest at 4.531 billion bushels.

"The soybeans surprised the trade," said Don Roose, president of Iowa-based broker U.S. Commodities.

The most-active soybean contract climbed 76 cents to end at $14.88-1/4 a bushel and touched its highest price since June 30 at $14.90-1/4. Corn settled 11 cents higher at $6.96 a bushel and hit its highest price since June 27.

CBOT wheat futures, meanwhile, ended lower after hitting a two-month high. The most-active contract fell 10-3/4 cents to $8.58-3/4 a bushel.

U.S. farmers will likely harvest 13.944 billion bushels of corn, with an average yield of 172.5 bushels per acre, the USDA said. Analysts had been expecting 14.088 billion bushels, based on a yield of 172.5 bushels per acre.

The USDA also cut is outlook for 2022/23 U.S. corn ending stocks to a 10-year-low of 1.219 billion bushels, from 1.388 billion. Soybean stocks were seen at a seven-year low, of 200 million bushels.

After the close of trading, the USDA, in a separate weekly report, lowered its good-excellent condition ratings for the corn and soy crops. Analysts, on average, were expecting steady ratings. The agency also said 5% of the nation's corn was harvested, above analysts' estimates for 4%.

"I think a lot of people, going into harvest, now think there is a strong incentive to store their grain because they think there's going to be a bullish rally going into next year," said Bob Utterback, president of Utterback Marketing.

(Reporting by Tom Polansek in Chicago. Additional reporting by Gus Trompiz in Paris, Enrico Dela Cruz in Manila, and Karl Plume and PJ Huffstutter in Chicago; Editing by Subhranshu Sahu, Uttaresh.V, Ed Osmond, Andrea Ricci and Cynthia Osterman)

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