Corn prices set course for their highest close in Chicago in six months after hopes for exports more than outweighed concerns at the prospect of the US crop breaking records for a second year running.

The US Department of Agriculture raised its forecast for America's corn yield by 1.5 bushels acres to 165.0 bushels per acre, a rise sufficient to eclipse last year's record.

The production estimate, which had already looked on course to set an all-time high, was lifted further, by 120m bushels, to 13.4bn bushels.

The revisions reflected farmers' rapid progress in sowing the crop in the spring, which, "coupled with above normal temperatures contributed to rapid [plant] development in many parts of the country", the USDA said.

Plant inspections at the start of the month had revealed highest-ever corn ear counts per acre in many states, including Illinois, Minnesota and Missouri.

"Forecasted yields are higher than last year across the upper Mississippi Valley and upper Great Lakes region where moderate temperatures and adequate soil moisture provided favourable growing conditions," the department added.

'Tighter foreign supplies' 

The revisions put the US crop ahead of analysts' expectations which, on average, had pegged the yield number at 164.1 bushels per acre, and production at less than 13.3bn bushels.

However, the USDA also lifted its expectations for consumption of the grain, raising forecasts for use in making starches and sweeteners, as well as a 100m-bushel lift to export hopes, reflecting "tighter foreign supplies", after dry weather cut hopes for output in the European Union and the former Soviet Union.

US corn stocks would end 2010-11 at 1.31bn bushels, 61m bushels less than previously expected and only marginally above market forecasts.

The revisions, and a soaring wheat price, helped corn post gains of 3.1% in Chicago, in late deals, leaving the September lot at $4.07 ¾ a bushel. A close at that level would be the highest since January.

"Its these demand numbers that are giving support to corn," broker US Commodities said.