Corn prices dropped to a five-month low, and wheat futures fell back to earth after gains fostered by a hefty Egyptian order, after Informa Economics hiked its estimate of US corn sowings next year to a 76-year high.

Informa analysts pegged US corn seedings for the 2013 harvest at 99.026m acres, meaning an extra 2.1m acres above plantings this year.

The upgrade surprised analysts, who had expected the group to keep its forecast for 2013 plantings steady at 97.7m acres.

And, if fulfilled, the extra area could imply a massive uplift in US crop production next year.

Factoring in the yield of 160 bushels per acre that many investors have pencilled in as a trend yield, and assuming a typical abandonment rate, implies a harvest of more than 14.5bn bushels, up by more than one-third from this year's drought-hit result.

Five-month low

The impact in Chicago was to send corn for March tumbling 2.6% to $7.01 ½ a bushel, the lowest for a spot contract in more than five months.

Technical selling fuelled the decline after the lot, in an echo of wheat futures earlier this month, fell below a trading range which it had trod since July, dropping through support levels and sparking fund selling.

Corn dragged wheat lower too, although Chicago's March contract managed - narrowly – to avoid setting its own five-month low, with the decline bottoming out at $8.02 a bushel.

Wheat gained support from sales by the US of 290,000 tonnes of the grain to Egypt, fuelling ideas over the competitiveness of the grain, and lifting hopes for further export orders.

Egyptian purchases 

Indeed, the orders had earlier sent March wheat higher, by 1.4% to $8.22 ¾ a bushel in Chicago and 1.5% to $8.73 ¼ a bushel in Kansas.

Egypt's state grain authority, Gasc, bought 180,000 tonnes of US soft red winter wheat, the type traded in Chicago, at a tender which highlighted the lower price of the grain compared with European supplies.Even factoring in an extra $10 a tonne or so of costs for shipping across the Atlantic, the US offers undercut the cheapest French wheat by $2.50 a tonne.

No offers from other countries were made, despite invitations by Gasc for prices on wheat from the major Black Sea exporters and origins including Canada, Australia and Argentina.

Lack of competition

Separately, the US Department of Agriculture revealed the sale of 110,000 tonnes of hard red winter wheat, as traded in Chicago, to Egypt, the top wheat importing country.

The trades lifted ideas that the US - after a disappointing start to 2012-13 for shipments, prompting a USDA downgrade last week to its forecast for domestic exports – may indeed see a substantial revival in its fortunes during the latter months of the marketing year.

"What is interesting is not so much that the US wheat won the Gasc tender, which had been pretty much expected, but that there was so little other wheat offered," a UK grain trader told Agrimoney.com.

In the last tender, two weeks ago, Romanian and Argentine wheat was also offered, and there was some expectation of Australian grain being offered this time.

Argentina scepticism

However, hopes for Argentine exports have declined with rains which have disrupted harvest and cut the quality of what is making it into the barn.

"Trade is increasingly sceptical regarding the USDA's Argentine wheat export forecast of 5.5m tonnes," Richard Feltes at RJ O'Brien.

Indeed, there was market talk on Wednesday that Brazil, which typically imports milling wheat from Argentina, was on the prowl for supplies from Canada or the US, having bought from Germany last month.