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GRAINS-Corn falls further after USDA raises crop forecast; soybeans steady

other producers (...) That's why the price is recouping its losses again

* Chicago corn futures down 2.6% to weakest since mid-May Higher U.S. crop forecast drags down market

* Soybeans firm as USDA production cut offsets corn pressure

* Wheat hovers near Monday low on big world supply, corn spillover

(Updates with European trading, changes byline/dateline) PARIS/SINGAPORE, Aug 13 (Reuters) - Chicago corn extended heavy losses on Tuesday, touching a near three-month low in the wake of the U.S. Department of Agriculture's surprise move to raise its outlook for U.S. corn production. However, soybeans, dragged lower on Monday by corn, recovered as the market shifted its attention to the U.S. Department of Agriculture (USDA) cutting its forecast for the U.S. soybean harvest. Wheat edged down as it continued to be curbed by corn as well as the USDA's outlook for ample global wheat supply. The most-active corn contract on the Chicago Board of Trade was down 2.6% at $3.82-3/4 a bushel by 1101 GMT, after earlier touching its lowest since May 17 at $3.80-1/4. On Monday, the contract dropped by its daily limit of 25 cents, or nearly 6%, following the monthly USDA crop report and technical pressure increased on Tuesday as it opened a chart gap to the downside. CME Group, which operates CBOT futures markets, increased the daily limit for corn to 40 cents for Tuesday's session. The USDA surprised grain markets by raising its outlook for this year's U.S. corn production as it reduced its estimate of rain-hit plantings by less than expected while increasing its harvest yield projection. "The market was shocked by the USDA's estimates of both area and yield," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia. "Getting rid of that extra corn takes a lot more chewing, distilling and shipping than the market was expecting." Traders and analysts had been anticipating a bigger reduction to U.S. corn acreage in view of torrential spring rain, while also expecting a lower yield than given by the USDA in light of the soggy spring that has been followed by dry summer conditions. CBOT soybeans added 0.9% to $8.86-3/4 a bushel, recovering some of its 1.5% decline on Monday. CBOT wheat edged down 0.3% to $4.70-1/2 a bushel but held above Monday's 2-1/2 month low of $4.66-1/2. The USDA pegged 2019 U.S. soybean output at 3.680 billion bushels, at the low end of market expectations, as it cut estimated acreage. "The soybean price was dragged down by corn yesterday, even though the USDA had reduced acreage even more sharply than expected," Commerzbank analysts said in a note. "This reduces the U.S. crop by 4.5 million tonnes, which will not be offset today." However, weakening Chinese demand, against a backdrop of a deepening trade dispute between Washington and Beijing, continued to hang over the soybean market, and a reduced export outlook partly offset smaller harvest supply in the USDA's outlook.

Prices at 1101 GMT

Last Change Pct End Ytd PctMove 2018 MoveCBOT wheat 470.50 -1.25 -0.26 503.25 -6.51CBOT corn 382.75 -10.00 -2.55 375.00 2.07CBOT soy 886.75 7.50 0.85 895.00 -0.92Paris wheat Dec 171.50 -1.00 -0.58 191.25 -10.33Paris maize Nov 167.25 -2.75 -1.62 175.25 -4.56Paris rape Nov 374.50 1.00 0.27 364.00 2.88WTI crude oil 54.84 -0.09 -0.16 45.41 20.77Euro/dlr 1.12 0.00 0.04 1.1469 -2.21

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 Joseph Radford and Susan Fenton)