The world's corn crop is to top 800m tonnes for the first time, thanks to raised hopes for Argentine and South African production, US officials have said in a report trimming price hopes for American farmers.

The US Department of Agriculture, in a much-watched report on global crop supplies, lifted by 5.9m tonnes to 803.7m tonnes its forecast for the world's 2009-10 corn harvest.

The revision reflected an increase of 3.8m tonnes - or 22% - to the harvest in Argentina, the world's second-biggest exporter of the grain, with South African production pegged 2.0m tonnes higher.

"Harvested area and yield are raised for both countries as abundant soil moisture and lack of stressful heat during the past month supported crops through critical stages of development," the USDA said.

'Export competition' 

The raises dwarfed a downward revision of some 500,000 tonnes to America's corn production following a resurvey of farmers, to take account of a harvest heavily delayed by a wet autumn.

Furthermore, its impact in shrinking year-end stocks was more than offset by weaker hopes for exports, "as larger foreign supplies increase competition".

American corn inventories will end 2009-10 at 27.2m tonnes (1.799bn bushels), the USDA said, increasing its estimate by 2.0m tonnes (80m bushels).

Growers would feel the impact of the slacker market in their pockets, with US farmgate prices set to average $3.45-3.75 per bushel over the season, down $0.20 on previous hopes.

Market reaction

The report was viewed by analysts as unsupportive for prices, with Allendale saying it would "cap any rallies until planting" of America's spring crop.

In Chicago, corn cosed down 0.9% at $3.55 ½ a bushel for March delivery, and by the same percentage to $3.65 ½ a bushel for May.