Agriculture big gun Joseph Glauber offered a triple dose of comfort for corn buyers, supporting ideas of record yield while downplaying competition from soybeans for acres, and use of the grain by ethanol plants.

Mr Glauber, the chief economist at the US Department of Agriculture, and so one of the most important people in world farming, said that corn prices should fall "significantly" thanks to the boost to supplies expected from an "incredible increase in corn production this year", led by the US, the top grower of the grain.

He acknowledged "a lot of speculation" that US growers switched to soybeans in their sowing plans, threatening a March forecast of corn plantings hitting a 75-year high of 95.9m acres, encouraged to swap by an improved price of the oilseed versus the grain.

However, "offsetting that has been the fact that we have had incredible weather for planting", he told the International Grains Council conference in London.

This is widely seen as a supportive factor for corn, given that it is earlier sown than soybeans.

The corn crop is developing "some two to three weeks ahead of schedule", and appears to be setting "a record pace".

Weather caution

Indeed, he handed a warning to sceptics of a bumper yield, despite the emergence "of some dryness in parts of the Midwest", particularly in "Iowa, bleeding into Illinois" – the two top corn-growing states.

"I caution anyone of making to much of that," Mr Glauber said, noting that USDA analysts were saying that "we should be seeing record yields this year".

The USDA last month raised to a record 166 bushels an acre its forecast for this year's US corn yield, although many analysts have questioned whether a reversal might be on the cards, given Midwest dryness, when the department unveils fresh estimates next week.

US-based broker Allendale, citing "May weather", overnight trimmed its forecast for the US corn yield by 0.8 bushels an acre to 163.0 bushels an acre.

'Flat demand'

Supplies will also be supported by stagnant demand for corn for ethanol plants, as production of the biofuel approaches the "wall" when it is sufficient to meet US renewable fuels targets, and given lower profitability prospects following the lapse at the end of last year of US tax credits.

"We will have a third year in a row of flat demand for corn for ethanol," Mr Glauber said.

Margins for ethanol plants had swung in and out of the black in 2012, reaching a positive $0.09 a gallon as of May 25.