The US Department of Agriculture, updating outline estimates unveiled last week, forecast the US corn crop soaring 15% to top 14bn bushels for the first time this year, backed by growth in yields as well as sowings.
Consumption will hit a record high too, supported by expansion at US pork and poultry farms, by growing exports, and the end of a long-term decline in the use of corn-based sweeteners by domestic drinks groups.
Even so, the harvest will cover use with some 800m bushels to spare, allowing a "sharp recovery" in inventories.
Stocks will end 2012-13 at 1.62m bushels, more than doubling year on year, and ending a two-season spell when historically low inventories have supported prices.
'Sharply lower prices'
Indeed, the recovery in supplies will put "substantial downward pressure on futures and cash corn prices" in 2012-13, with values set to drop "sharply lower by fall harvest".
While restating a forecast that farmers will receive an average of $5.00 a bushel for this year's production, down 19.4% year on year, the USDA said that even gaining a result at this level requires selling ahead of harvest, while values are still high.
"Prices received by producers are expected to reflect substantial forward pricing at values well above $5 a bushel," the department said, implying many sales being undertaken at below $5 a bushel.
Ethanol use drops, HFCS steadies
The forecasts factored in the softer outlook for corn use by ethanol plants outlined on Thursday by Joseph Glauber, the USDA chief economist, thanks to expectations of smaller exports to Brazil, whose production of cane-based biofuels is expected to recover, and of US use hitting the "blend wall".
The impact of slower economic growth means less use of transport than US statisticians expected when setting out ethanol forecasts in 2007, and means that less of the biofuel is needed to meet the requirements of so-called E10 – in which it is mixed to a level of 10% with gasoline.
2012-13 US corn forecasts, change on previous, and (on 2011-12)
Plantings: 94.0m acres, unchanged, (+2.3%)
Yield: 164bpa, unchanged, (+11.4%)
Production: 14.270bn bushels, +35m bushels, (+15.5%)
Feed, residual use: 5.20bn bushels, -25m bushels, (+13.0%)
Food, seed, industrial use: 6.37bn bushels, unchanged, (-0.5%)
Exports: 1.90bn bushels, +25m bushels, (+11.8%)
Carry-out stocks: 1.616bn bushels, -7m bushels, (+102%)
Previous data=baseline forecast. Source: USDA
However, the estimates also assumed a rise in demand for corn starch by paper and construction industries.
And they factored in an end to a drop in the use by American drink makers of high fructose corn syrup, which has attracted allegations – which corn processors strongly deny – of links to obesity, and attracted high-profile critics including Michelle Obama, the US First Lady.
"Domestic high fructose corn syrup (HFCS) use is expected to stabilise in 2012-13 after declining steadily over the past eight years," the USDA said.
The data were viewed by investors as broadly bearish, with broker US Commodities noting that the US stocks-to-use ratio for corn will move to a "very comfortable" 12.0% at the close of next season, from 6.3% at the end of 2011-12.
This ratio, as a measure of the availability of stocks, is viewed as a key indication of the price buyers will need to pay to secure supplies.
However, some analysts raised questions over the 164-bushels-per acre yield figure, after two seasons when lofty yield estimates have foundered.
GrainAnalyst.com trader Matthew Pierce rated such a yield "equally probable" to the Chicago Cubs baseball team winning the World Series, a feat not achieved in 103 years.
Corn prices stood 0.6% lower at $6.35 ¾ a bushel at 16:15 GMT.