Corn prices are poised for a fall of up to 10% within less than a month – but investors who hold on will be rewarded with prices higher even than today's levels, Societe Generale has said.

An influential report on June 30, in which the US Department of Agriculture will estimate American crop sowings this year, is "likely to be bearish" in showing a rise in expectations for corn plantings.

The temptation for investors to sell may be heightened further on July 9, when the USDA unveils a monthly report on global crop supply and demand.

"This will reflect the increased volume of corn plantings, and yields forecasts may also be revised slightly upwards," SocGen commodities analyst Emmanuel Jayet said.

"In short, we will likely see further bearish reporting in early July."

'Clear bullish trend'

The pressure from the reports may drag prices as low as $3.20 a bushel by mid-July.

Chicago's July lot stood at $3.54 ½ a bushel on Tuesday morning, with the September lot at $3.63 ¾ a bushel.

The degree of decline "also depends on macro drivers, namely crude oil and the dollar", Mr Jayet added.

Whatever, it was likely to be followed by a "clear bullish trend, that could bring prices to above $4 a bushel again by the end of the year".

This rebound would be driven by a rise in hopes for feed use, as livestock farmers return to rebuilding herds, and growing ethanol demand during America's summer driving season.

 "Furthermore… with yield forecasts at record levels, and based on favourable weather conditions, there will be increased risks of seeing downward revisions if the weather turns out to be less favourable than forecast," the note said.

"This is the exact opposite of last year, when conservative preliminary yield forecasts were subsequently revised upwards."

Ethanol 'dismay'

Hopes may also build that environmental authorities will lift the ceiling, from 10%, on the proportion of ethanol that can be blended with conventional petrol in forecourt fuel, Mr Jayet said, even though a decision has again been delayed.

The American Farm Bureau Federation said on Monday it was "dismayed" by the hold-up, which looked likely to see a decision made in September.

"The Environmental Protection Agency's delay is frustrating," said Bob Stallman, the federation president.

""The request to increase the percentage of ethanol that could be blended into our domestic gasoline supply to [15%] should be a front-burner issue."