U.S. government cuts corn, soy supply view on harvest setbacks

CHICAGO, Sept 12 (Reuters) - U.S. corn and soybean supplies will fall to multi-year lows as hot and dry weather during August in western growing areas cut into the harvest potential for both crops, the government said on Monday.

The U.S. Agriculture Department cut its outlook for U.S. corn end stocks in the 2022/23 to a 10-year-low of 1.219 billion bushels, from 1.388 billion. Soybean supplies were seen at a seven-year low, of 200 million bushels.

The world was counting on massive U.S. production this fall, to help make up for diminished grain exports from war-torn Ukraine. Though recent Black Sea-area shipments of grain have flowed into the global market in recent weeks, continued geopolitical unrest and supply chain uncertainty has sent ructions through the futures market in the past week.

Chicago Board of Trade soybean futures surged after the report was released, with the most-active contract up 4.2% and on pace for its biggest daily gain in 2-1/2 months. Corn futures rallied to their highest since June 28.