Washington has surprised traders by raising its estimate for America's corn production to a record 13.2m bushels (334.1m tonnes), despite the lengthy delays to harvesting which have left a chunk of the crop in the field.

The data sent corn limit down in Chicago.

The US Department of Agriculture lifted by 230m bushels (5.84m tonnes) its estimate for the 2009-10 crop, taking the harvest past the previous record set two years before.

The increase, which reflected an increase to 165.2 bushels per acre in the USDA's yield assessment for the crop, defied expectations from traders that Washington would cut its forecast by 100m bushels to reflect the impact of the late harvest.

"[The] market was looking for USDA to reduce the size of the crop due to late harvest and yield losses on crop still in the field – but USDA raised the crop on better yields," broker Benson Quinn Commodities said.

Nearly one-third of North Dakota's corn crop was yet to be harvested, data last week showed, and there were doubts as to the quality of much of what had reached farm bins, with wet weather causing some mould damage.

'Very bearish numbers'

The statistics sent March corn down 30 cents, or 7.1%, to $3.92 ½ a bushel in Chicago, the maximum decline allowed in one session under exchange rules.

"There are currently over 39,000 March corn contracts offered for sale at limit down," Darrell Holaday at broker Country Futures said half way through the trading days.

Vic Lespinasse, at GrainAnalyst.com, said: "The USDA said they will resurvey farmers in some states for the March 10 crop production report and update... estimates, which could result in lower numbers.

"However, we have to live with this morning's very bearish numbers for now and they will weigh heavily on the market today no matter what the USDA might do two months from now."

January estimates are usually presented as final.

Higher inventories 

The rise in production, in part offset by growing hopes for feed use of corn, was reflected in an 89m-bushel rise to 1.76bn bushels in the forecast for US stocks at the end of the 2009-10.

It also led a 6.3m-tonne (248m-bushel) rise, to 796.5m tonnes (31.4bn bushels)  in the estimate for global corn output in 2009-10, with the guess for Argentina's crop also raised, by 1.0m tonnes to 15.0m tonnes.

Global corn inventories will end 2009-10 at 136.2m tonnes.