* U.S. soybean production pegged lower than USDA - Pro Farmer
* Soybeans and corn output seen at lowest levels since 2003
* Hopes for Chinese, U.S. steps to stimulate the global economy (Updates prices, adds detail, adds quote)
By Colin Packham
SYDNEY, Aug 27 (Reuters) - U.S. soybeans struck contract highs on Monday after a key farm newsletter estimated the drought damage to the U.S. soybean crop was worse than government forecasts, while hopes for measures to stimulate the global economy also underpinned prices.
The jump in soybeans came after Pro Farmer released its corn and soybean production forecasts at the end of trading on Friday, predicting grain and oilseed production will fall to the lowest since 2003.
Chicago Board Of Trade November soybeans rose 1.53 percent to $17.58 a bushel By 0545 GMT, having hit a contract high of $17.60-1/2 a bushel earlier in the session.
The previous record of $17.44-3/4 was set on Aug. 23.
"The crop tour was concluded last week, and the results were disappointing for both corn and soybeans, and that is supporting the grains market today," said Ker Chung Yang, commodities analyst at Phillip Futures in Singapore.
"There is also continuous talk of another round of stimulus in the U.S. and China, which is adding strength to the market."
There have been further signs in recent days that China and the United States are moving close to bringing in measures to boost their economies, which would help boost demand.
December corn rose 0.9 percent to $8.15-3/4 a bushel, recouping all of the losses from the previous session when the grain fell 0.77 percent.
New-crop wheat tracked corn, climbing 0.79 percent to $8.95-1/2 a bushel.
SURVEY OF MORE THAN 2,200 FIELDS
Pro Farmer released its estimate following its annual crop tour, which surveyed more than 2,200 corn and soybean fields in Midwest states that accounted for 73 percent of U.S. corn production in 2011 and 66 percent of soybean production.
It estimated the U.S. soybean harvest at lower levels than forecast by the U.S. Department of Agriculture after the worst drought in the U.S. Midwest in 56 years.
It pegged soybean production at 2.60 billion bushels on a yield of 34.8 bushels per acre. Earlier this month, USDA estimated the soybean harvest at 2.692 billion bushels and yield at 36.1 bushels per acre.
U.S. corn production was forecast at 10.478 billion bushels, based on a yield of 120.25 bushels per acre. That compares with the USDA's latest forecast of a 10.779 billion bushel crop on a yield of 123.4 bushels per acre.
U.S., CHINA STIMULUS HOPES
Soybeans also gained after China, the world's largest importer of the oilseed, indicated it was looking at measures to support its economy.
China should ready plans to respond to near-term risks in an economy facing significant downward pressure, but keep the broad policy focus on longer-term structural adjustments, the official People's Daily said in a front page editorial on Friday, suggesting that Beijing has not ruled out more imminent stimulus policies.
China will implement new measures aimed at stabilising export growth in the third quarter, Premier Wen Jiabao said while visiting the export hub of Guangdong province.
Further boosting macro economic sentiment was U.S. Federal Reserve Chairman Ben Bernanke's letter to a Congressional oversight panel that said the Fed has room to deliver additional monetary stimulus to boost the U.S. economy.
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