UPDATE 2-U.S. corn, soy supplies pressured by harvest cuts; prices surge

(Adds analyst quote, background, details)

By Mark Weinraub

CHICAGO, Jan 12 (Reuters) - U.S. soybean and corn supplies in September will be smaller than previously forecast due to a reduced estimate of last fall's harvest, the U.S. Agriculture Department said on Tuesday.

The crop revisions will intensify fears of shortages in 2021, after governments tried to lock in extra food supplies amid the COVID-19 pandemic that disrupted global supply chains and thinned U.S. stockpiles.

Concerns about tight supplies have pushed Chicago Board of Trade corn, soybean and wheat futures to multi-year peaks in recent weeks and prices for all three commodities surged to fresh highs, hitting levels not seen since 2014 as investors digested the data.

"The U.S. numbers are creating more of the sticker shock, with USDA not only reducing 2020 supplies, or current crop year supplies, but also realizing that demand - especially led by beans - is fairly strong," said Terry Reilly, senior analyst with Futures International.

USDA pegged the 2020/21 domestic soybean ending stocks outlook at 140 million bushels, down from its December forecast for 175 million, and corn ending stocks at 1.552 billion bushels, down from 1.702 billion in December.

U.S. corn production for the 2020/21 marketing year was pegged at 14.182 billion bushels and soybean production was pegged at 4.135 billion bushels.

The soybean harvest view fell below the average of market expectations, and corn production missed the low end of a range of analysts' estimates in a Reuters poll.

USDA also lowered its forecast for upcoming harvests in key export countries Brazil and Argentina.

Soybean production in top producer Brazil was pegged at 133.00 million tonnes, unchanged from the previous outlook. Brazil's corn harvest was seen at 109.00 million tonnes.

In Argentina, where farmers have struggled with drought throughout the growing season, USDA predicted a soybean harvest of 48.00 million tonnes and a corn harvest of 47.50 million tonnes. (Additional reporting by Tom Polansek Editing by Caroline Stauffer and Peter Graff)

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