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GRAINS-Soybeans hit 2-1/2-month high after USDA cuts yield estimate

* USDA bucks trade expectations for a higher soy yield
* CBOT corn follows soy higher, rallying from contract lows
* Wheat sags after USDA raises U.S., global stocks view

(Updates with closing prices)
By Julie Ingwersen
CHICAGO, Oct 12 (Reuters) - Chicago soybean futures jumped
to a 2-1/2-month high on Thursday after the U.S. Department of
Agriculture lowered its U.S. soybean yield estimate in a monthly
report, bucking trade expectations for a slight increase.
Corn futures followed soybeans higher, rallying after
front-month December set a contract low, while wheat futures
retreated.
Chicago Board of Trade November soybeans settled up
26-3/4 cents at $9.92 per bushel after reaching $9.97-3/4, the
contract's highest since Aug. 1.
CBOT December corn ended up 3 cents at $3.49 a bushel
while December wheat fell 2-3/4 cents to $4.30-1/2 a
bushel.
Soybean futures surged after the USDA cut its U.S. soy yield
estimate to 49.5 bushels per acre (bpa), down from 49.9 in
September and below all but one estimate in a Reuters poll.

"There's no question in my mind that the trade was expecting
a bigger yield in both corn and beans. They probably could have
tolerated an unchanged yield in beans, but to see it drop was
quite a surprise," said Mike Zuzolo of Global Commodity
Analytics.
Soybeans drew additional support from worries about
below-normal rainfall in northern portions of Brazil's soy belt,
where planting is under way.
Corn futures followed soybeans higher, rallying after the
December contract fell to a life-of-contract low at
$3.42-1/2.
Corn firmed despite the USDA raising its U.S. corn yield
estimate to 171.8 bpa, above even the highest in a range of
trade estimates.
"If it wasn't for soybeans making these big gains, corn
would be on the negative side right now because there's nothing
there to support it," said Karl Setzer, analyst with the
MaxYield Cooperative.
CBOT wheat turned lower after following soybeans and corn
higher. The CBOT December contract touched a six-week low,
pressured by the USDA raising its U.S. and global 2017/18 wheat
ending stocks forecasts.
"The international wheat numbers were devastating, with
world production up 7 million tonnes, nearly equal to last
year's production," ED&F Man Capital analyst Charlie Sernatinger
wrote in a note to clients.

CBOT settlement prices:
Last Net Pct Volume
change change
CBOT wheat WZ7 430.50 -2.75 -0.6 72999
CBOT corn CZ7 349.00 3.00 0.9 320529
CBOT soybeans SX7 992.00 26.75 2.8 278500
CBOT soymeal SMZ7 326.30 11.40 3.6 87080
CBOT soyoil BOZ7 33.28 0.13 0.4 81454
NOTE: CBOT December wheat, December corn and November
soybeans shown in cents per bushel, December soymeal in dollars
per short ton and December soyoil in cents per lb.

(Additional reporting by Naveen Thukral in Singapore and Gus
Trompiz in Paris; Editing by Marguerita Choy)

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