Official statisticians have raised their forecast for US corn production by 471m bushels (12.0m tonnes) ï¿½ twice the amount the market expected � noting better yields combined with the strongest plantings for 60 years.

The US Department of Agriculture kept its estimate of corn plantings on hold at 87.0m acres, dashing the hopes of traders that a wet June had prevented farmers from sowing up to 2m acres of the crop.

Coupled with a yield now estimated at 159.5 bushels per acre, compared with a July guess of 153.4 bushels per acre, the crop was on course to come in at 12.8bn bushels (324.1m tonnes), the second biggest crop ever, the USDA said.

Investors had been expecting an estimate of a 12.5bn-bushel harvest.

Price drop

Nonetheless, US stockpiles were set to grow less fast than earlier predicted, thanks to raised hopes for exports and demand from ethanol producers � in part because of lower corn prices.

Farmers could expect at best $3.90 a bushel for their corn in the year starting next month, $0.25 less than forecast last month, with returns that high down to selling ahead while prices were higher.

"The marketing-year average reflects higher prices for corn sold for forward delivery over the past several months ahead of the sharp downturn in futures and cash market prices since early June," the USDA said.

Stocks would end this month at 1.72bn bushels, 280m bushels less than investors had forecast, with inventories in August 2010 pegged at 1.62bn bushels.

The market had been braced for a 1.70bn bushel figure, according to a Reuters poll.

September corn dipped 2.3% to $3.19 a bushel in early deals in Chicago before recovering to $3.30 ï¿½ a bushel, up 1.3% on the day.