GRAINS-CBOT corn drops to 2-month low on report of massive stocks, record harvest

By P.J. Huffstutter

CHICAGO, Jan 12 (Reuters) - U.S. corn futures plunged on Monday after the U.S. Department of Agriculture reported that U.S. farmers and grain companies held the most corn in storage ever as of December 1, after growers harvested a record-breaking crop that was even bigger than previously expected.

The most-active corn futures contract on a continuous basis Cv1 fell to the lowest prices seen since November 10 on the news, analysts said.

Meanwhile, Chicago Board of Trade soybean futures also dropped sharply, as USDA estimated that farmers also produced a larger-than-previously reported harvest and lowered its estimate for the nation's soybean export sales in the current crop year - bearish news as President Donald Trump's trade war with China has chilled demand from the world's biggest importer.

"For soybeans, the anchor on the market is exports," said Don Roose, president of US Commodities. "As we hit first of February, our exports are just going to die," he said, citing cheaper prices for soybeans shipped from rival supplier Brazil.

The flurry of data came as USDA published its annual U.S. crop production, quarterly grain stocks, U.S. winter wheat seeding and monthly World Agricultural Supply and Demand Estimates (WASDE) reports.

Chicago Board of Trade most-active corn Cv1 were down 18 cents at $4.27-3/4 a bushel at 11:41 a.m. CST (1741 GMT). Soybean futures Sv1 fell 11-1/4 cents at $10.51-1/4 a bushel.

Wheat futures were down 7-1/4 cents at $5.10 a bushel, facing some spill-over pressure from corn futures. Before the USDA reports were released, wheat futures had seen some support by dryness concerns in the U.S. Plains, analysts said.

But traders cautioned that it was too early in the season for dry conditions to materially affect winter wheat yields, with crop conditions still looking relatively good across the region.

Prior to the reports, Chicago grain and soybean futures had turned higher on news of more U.S. soybean sales to China and weakness in the U.S. dollar, making U.S. grains and oilseeds cheaper in export markets.

On Friday, Chinese state agency Sinograin purchased at least 10 cargoes of U.S. soybeans, moving closer to fulfilling a commitment to buy 12 million metric tons of the latest U.S. soybean harvest by the end of February. On Tuesday, Sinograin will auction 1.1 million tons of imported soybeans as the state stockpiler works to make room for arriving U.S. shipments.