That is the finding of the latest Crop Production report released yesterday by the US Department of Agriculture's National Agricultural Statistics Service.

Corn production is forecast at 12.3 billion bushels, down 6pc from last year's record, but up 17pc from 2006.

Based on conditions as of August 1, corn yields are expected to average 155 bushels per acre, up 3.9 bushels from last year.

If realised, this would be the second highest corn yield on record, behind 2004.

Growers are expected to harvest 79.3 million acres of corn for grain, down 8pc from last year.

The estimate was on the high end of trade estimates, however, most of the unexpected production gain was offset by higher demand, said Richard Feltes, analyst for MF Global.

USDA raised feed and residual use 100 million bushels with the larger crop and lower expected prices.

Ethanol use was also raised 150 million bushels as increased supplies and lower prices are expected to improve plant operating margins and capacity utilisation rates.

Dan Basse, president of AgResource Company, said feed residual numbers could continue to be further corrected higher with improved profitability for the protein sectors.

Sliding corn prices are again making wheat less economical to feed compared to corn.

USDA projected soybean production at 2.97 billion bushels, up 15pc from last year but down 7pc from the 2006 record.

Yields are expected to average 40.5 bushels per acre, down 0.7 bushels from 2007, while harvested area is expected to be 17pc higher than in 2007.