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GRAINS-Corn eases after surge as market weighs USDA forecast cut

Gus Trompiz and Naveen Thukral

* Chicago corn climbed almost 3 pct on Tuesday after USDA report

* Agency surprised market with steep cut to corn yield forecast

* Traders assess fallout from torrential rain this spring

* Wheat little changed after rise, soybeans tick lower

(Updates with European trading, changes byline/dateline) PARIS/SINGAPORE, June 12 (Reuters) - Chicago corn futures eased on Wednesday as the market took a breather after the last session's near 3% climb, when a bigger than expected cut to the U.S. harvest forecast deepened concern about the impact of torrential rain. Wheat was little changed, having tracked corn higher on Tuesday, while soybeans eased. The most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.4% at $4.26-1/4 a bushel by 1124 GMT, having risen 2.9% in the previous session when it touched a one-week high. The U.S. Department of Agriculture (USDA) slashed its corn yield projection in a monthly report on Tuesday by 10 bushels an acre, or 5.7%, to 166 bushels. Analysts had on average expected a smaller decline to 172.4 bushels.

The drop, along with a 3% decrease in the USDA's acreage estimate, left the government's production outlook at 13.68 billion bushels, which would be the smallest harvest in four years. "Our estimates now have the U.S. corn loss at 40-50 million tonnes, so the USDA will show more reduction in the next few months," said Ole Houe, director of advisory services at brokerage IKON Commodities. A soggy spring in the U.S. Midwest has led to the slowest corn planting pace on record, raising the prospect that some acreage will be lost while planted crop will lose yield potential. Drier conditions last week helped planting accelerate and traders are watching to see if more heavy rain forecast in parts of the Midwest in the week ahead adds a further threat to planting and yield prospects. "In the coming few months, CBOT traders will hotly debate the weekly crop conditions and implications for yield potential above or below 170 bushels per acre," Rabobank analysts said in a note. "The market will also grapple with current high inventories and the potential that these can buffer a supply-side shock." CBOT wheat was up a quarter of a cent at $5.18-1/4 a bushel, after ending Tuesday up 2.1%, and soybeans were down 0.3% at $8.56-1/2 a bushel. The USDA cut its projection of U.S. wheat stocks at the end of 2019/20, anticipating some feed demand would shift to wheat given reduced corn supply. At the same time, it raised its forecast for U.S. wheat production while also increasing output estimates for major wheat exporters Russia and Ukraine.

The agency on Tuesday kept its U.S. production and yield estimates for soybeans unchanged, noting soybean planting could continue for several weeks, but this surprised analysts who were expecting declines. Adjustments to the soybean crop outlook can be expected in the USDA's July report, its chief economist told Reuters at an industry event in London.

Prices at 1124 GMT

Last Change Pct End Ytd PctMove 2018 MoveCBOT wheat 518.25 0.25 0.05 503.25 2.98CBOT corn 426.25 -1.50 -0.35 375.00 13.67CBOT soy 856.50 -2.75 -0.32 895.00 -4.30Paris wheat Sep 177.75 0.00 0.00 190.50 -6.69Paris maize Aug 175.00 -1.00 -0.57 187.25 -6.54Paris rape Aug 365.50 -1.25 -0.34 362.25 0.90WTI crude oil 51.79 -1.48 -2.78 45.41 14.05Euro/dlr 1.13 0.00 -0.06 1.1469 -1.28

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Richard Pullin and Jan Harvey)