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UPDATE 2-Lower outlook for U.S. domestic sugar supplies in 2018/19 -USDA

(Updates with milestones, details, commentary)

NEW YORK, Nov 8 (Reuters) - The U.S. Department of Agriculture on Thursday lowered its outlook for sugar stocks in the current crop year on reduced expectations for domestic production.

The closely watched stocks-to-use ratio was seen at 11.3 for 2018/19, down from October's forecast of 12.7, the USDA said in its monthly supply-demand report. That compares with a ratio of 16.0 in the 2017/18 crop year that ended Sept. 30.

This was the lowest projection in a monthly report since July 2017.

U.S. sugar farmers will produce 9.02 million short tons (8.18 million tonnes) in 2018/19, down from 9.29 million tons a year earlier, as a drop in beet output offset higher cane production.

Beet output in 2018/19 is expected to decline to 4.97 million tons, down from last month's forecast of 5.24 million tons. Such production levels would make for the smallest beet crop since the 2014/15 season, USDA data shows.

The outlook for sugarcane production, however, was revised up to 4.041 million tons from 4.026 million tons. This is the largest production number since the 2000/01 season, according to USDA data.

"Good weather and additional planted area are the reasons for the cane increase," said Frank Jenkins, president of JSG Commodities in Norwalk, Connecticut. "The more the U.S. produces domestically, the less competition from Mexico, so we’d expect to see that trend continue," Jenkins added.

The forecast for total imports was unchanged at 2.80 million tons.

To read more details from this month's report, go here: . (Reporting by Chris Prentice and Ayenat Mersie in New York; Editing by Phil Berlowitz and Dan Grebler)

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