(New throughout; adds market reaction and China forecast)
* Record US corn crop means largest stocks since 2006
* 2012/13 US soy stocks/use ratio historically low 4.4
* Record global rice crop, world soy crop up 15 pct
* Soy futures up 1.9 pct, corn down on USDA data
* Big crops hinge on very favorable weather-Analyst
By Charles Abbott
WASHINGTON, May 10 (Reuters) - A record U.S. corn crop this fall will end two years of nail-biting tight supplies, the government predicted on Thursday, while its forecasts for lower-than-expected global stocks of wheat and soybeans may keep food prices high.
The U.S. Agriculture Department’s first estimates for this year’s harvest and next year’s demand showed that domestic corn stocks will surge from a near record low this year to a seven-year high by September 2013, aided by expected record yields this year as farmers sprinted to plant an early crop.
USDA had less bountiful outlooks for other supplies, with domestic soybean inventories seen falling to 145 million bushels for the 2012/13 year from 210 million this year, with a stocks-to-use ratio “at a historically low 4.4 percent.”
The 145 million is slightly more than a two-week supply. Analysts had forecast 164 million bushels.
Futures prices soared 1.9 percent for new-crop soybeans, the largest gain in 5-1/2 weeks at the Chicago Board of Trade. New-crop corn, for delivery in December, fell by 1.4 percent to $5.09-3/4 a bushel, the lowest price since March 2011.
The report threatens to extend a cycle of volatile prices, with a shortage of one crop in one year giving way to a shortage of another in the next. Food prices spiked in 2008 and have remained high and volatile since then because of the razor-thin stocks and huge demand globally, especially from a hungry China.
Although soybean prices have led the complex this year, some analysts were still betting that corn -- the grain that’s been in greatest deficit -- would set the longer-term tone.
“The upshot is that corn is the locomotive that pulls the grain train, and that engine is headed south,” said Charlie Sernatinger, analyst with ABN AMRO.
Graphics on USDA forecasts:
Record-large corn and rice crops are forecast worldwide, with corn up 9 percent and rice up marginally. The wheat supply would drop by 2 percent and soybeans stocks will rise by 9 percent but still not as much as traders expected. It would be the sixth year in a row for record world corn production.
China, a negligible corn importer a year ago, is forecast to become the No 4 importer in the new marketing year. USDA estimated China will buy 7 million tonnes of corn, up from 5 million this year. Beijing also would buy 61 million tonnes of soybeans, one-fourth of the world soy crop, USDA estimated, up from this year’s 56 million tonnes.
“It’s built on a very favorable weather scenario. It’s not out of question, but things could turn out differently,” said analyst Mark McMinimy of Guggenheim Partners after reviewing the forecasts. “It’s all prospective, as it always is at this time of the year.”
Besides the record U.S. crop, USDA foresees rebounds in Ukraine and Argentina corn and a third consecutive record Chinese corn crop.
Soybeans could be more plentiful than now forecast, McMinimy said. High market prices may prompt U.S. farmers to plant more land to the oilseed. A shift of 1 million acres would add 43 million bushels to the crop and mean more palatable end stocks.
USDA said mild weather, plentiful rainfall and an early start to planting will result in big U.S. crops. It estimates the corn yield at a record 166 bushels an acre, 2 bushels higher than a USDA trend-line average, due to the favorable start to the crop year. The soybean crop would be the third largest on record with high yields offsetting a projected 1 percent drop in plantings from 2011.
Even with a 9 percent increase in corn use, ending stocks are forecast to more than double to 1.881 billion bushels, the largest carryover since 2005/06 and 10 percent more than traders expected.
Soybean production worldwide will hit 271.4 million tonnes, up 15 percent from this year, as South America rebounds from drought, USDA projected. Brazil should harvest a record 78 million tonnes, up 20 percent.
USDA projected an overall U.S. wheat harvest, including spring-planted varieties, of 2.2 billion bushels, the most in four years. It estimated the winter wheat crop, nearly ready for harvest, at 1.7 billion bushels, up 13 percent from last year’s drought-hit total. (Reporting By Charles Abbott; Editing by Bob Burgdorfer)