GRAINS-Corn dives after USDA sharply raises US crop outlook, soybeans rise

By Karl Plume

CHICAGO, Aug 12 (Reuters) - U.S. corn futures plunged to contract lows on Tuesday after the Department of Agriculture projected a record-shattering corn harvest this year as farmers planted more acres than expected and the crop faced few weather challenges this summer.

Soybeans reversed earlier losses after the USDA, in a monthly crop supply and demand report, forecast a smaller-than-expected U.S. harvest and tighter supplies as growers seeded fewer acres than previously thought.

Chicago Board of Trade wheat followed corn futures lower, posting fresh contract lows in all months under pressure from ample global supplies.

Analysts polled ahead of the report had been expecting the USDA to raise its corn and soy yield outlooks following favourable summer weather. But the agency's large corn planted acres increase, and its big cut to soybean plantings, shocked the market.

"The big surprise ... was the acreage adjustment made by the USDA. It slashed 2.5 million from soybean planted acres, putting 2.1 million of those acres into corn to increase the size of that crop that already had the bumper yield," said Arlan Suderman, chief commodities economist with StoneX.

The USDA projected an average U.S. corn yield of 188.8 bushels per acre and a 16.742-billion-bushel harvest, both all-time records and well above analysts' pre-report estimates.

Soybean yields were seen at a record 53.6 bpa, although the total crop was only forecast to be the sixth largest ever at 4.292 billion bushels.

CBOT December corn CZ25 dropped 14-1/2 cents to $3.93-1/4 a bushel by 12:35 p.m. CDT (1735 GMT). All contracts from September 2025 CU25 through September 2026 CU26 posted lifetime lows.

November soybeans SX25 were 13 cents higher at $10.24-1/4 a bushel, bucking earlier pressure stemming from a sharp drop in canola futures following China's announcement of anti-dumping duties on Canadian imports.

CBOT September wheat WU25 was down 11-1/4 cents to $5.03-3/4 a bushel. All CBOT wheat contracts posted fresh contract lows.