UPDATE 1-U.S. government cuts corn, soy harvest outlook after August weather scares

(Adds analyst and USDA comments, details of outlook)

By Mark Weinraub

CHICAGO, Sept 11 (Reuters) - U.S. corn and soybean production will be smaller than previously expected after dry weather throughout August and a severe wind storm that damaged crops across the key production state of Iowa, the U.S. Agriculture Department said on Friday.

"August was a month of extreme weather and climate disasters," USDA said in its monthly Crop Production report. "There were also slow-motion events, such as worsening Western drought and a stripe across the Midwest and Northeast that experienced significant rainfall deficits."

The government forecast the U.S. corn harvest at 14.900 billion bushels, based on an average yield of 178.5 bushels per acre. The soybean harvest was seen at 4.313 billion bushels, based on an average yield of 51.9 bushels per acre. Both were in line with market expectations.

If realized, the corn yield projection would be the highest ever. Soybean yields would tie the all-time record.

The government's August forecast put the corn harvest at 15.278 billion bushels and the soybean harvest at 4.425 billion bushels.

In its separate World Agricultural Supply and Demand Estimates report released at the same time, USDA lowered its estimate of 2020/21 ending stocks by 150 million bushels to 460 million bushels for soybeans and by 253 million bushels to 2.503 billion bushels for corn.

It left its outlook of 2020/21 soybean exports unchanged at 2.125 billion bushels despite a recent string of purchases by China. But it did boost its corn export outlook by 100 million bushels to 2.325 billion bushels.

"These will be considered friendly reports all around and ... leaves plenty of room for demand increases down the road," said Charlie Sernatinger, global head of grain futures at ED&F Man Capital.

Soybean futures jumped to their highest level since June 2018, with analysts saying the market was underpinned by expectations the government would boost its export view in coming months. (Reporting by Mark Weinraub and Julie Ingwersen in Chicago Editing by Chizu Nomiyama and Matthew Lewis)

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