GRAINS-Chicago grains lower after USDA quarterly stocks report

By Heather Schlitz

CHICAGO, Sept 30 (Reuters) - Chicago soybean, corn and wheat futures fell on Tuesday on a bearish U.S. Department of Agriculture quarterly stocks report, U.S. harvest progress and a lack of Chinese demand hung over the markets, analysts said.

The USDA's quarterly stocks report, one of the most closely tracked publications in grain markets, showed U.S. farmers and grain handlers had 13% less corn in storage ahead of the autumn harvest than a year earlier, though a record-large crop was set to replenish inventories.

The USDA said in a quarterly report that there were 1.532 billion bushels of corn in storage as of September 1. That was above analysts' expectations for 1.337 billion bushels.

"It's the primary reason we're seeing some pressure right now," Rich Nelson, strategist at Allendale, said.

The run-up to a possible U.S. government shutdown from Wednesday also encouraged caution on grain and wider financial markets. MKTS/GLOB

The most-active Chicago Board of Trade corn contract Cv1 was down 6 cents to $4.15-1/2 a bushel as of 12:30 p.m. CT (1730 GMT), while CBOT wheat Wv1 ticked down 11 cents to $5.08-1/2 a bushel. CBOT soybeans Sv1 were down 9-3/4 cents to $10.01 a bushel.

A lack of export demand for soybeans has been the primary factor weighing on soy futures, analysts said.

U.S. soybean exporters are missing out on business to China amid a trade war between the two nations, with rival suppliers from South America taking their share.

Pressure from ongoing U.S. corn and soy harvests has also pressured futures. Warm and dry weather over the U.S. grain belt helped harvesting over the weekend, and forecasts called for more of the same this week.

Corn, which has found support from brisk exports and doubts over U.S. yield potential, was set to be virtually unchanged over the month and higher for the quarter.