WRAPUP 3-USDA forecasts record corn crop; futures tumble

 * Corn crop sets new record, up 1 pct vs previous 2007 top
 * Soybean record crop also bigger, up 8 pct from 2008 top
 * Chicago futures plunge, corn drops daily limit
 * News hits stocks of major fertilizer companies
 * Wheat crop could be smallest since 1991
 (Updates market reaction, adds implied winter wheat
 By Roberta Rampton
 WASHINGTON, Jan 12 (Reuters) - The U.S. Agriculture
Department bumped up its estimate for 2009 U.S. corn production
to a new record on Tuesday, shocking traders who anticipated a
decline after a difficult harvest.
 The news sent Chicago futures prices plunging, with March
corn CH0 locked down the daily 30-cent limit, or 7 percent,
to $3.92-1/2 and January soybeans SF0 down 3.6 percent to
$9.66 per bushel. [ID:nLDE60B1C2]
 The corn crop was pegged at 13.151 billion bushels, up 230
million bushels from the government's last forecast and 330
million bushels higher than the average of analysts' estimates,
12.821 billion bushels. The USDA projection even topped the
highest trade estimate of 12.996 billion bushels.
 "There's not a lot here for the bull to hang his hat on.
It's going to be ugly," said Jack Scoville, vice president and
senior analyst at The Price Futures Group. [ID:nN12188864]
 Corn options indicated futures could fall another 2 to 3
cents, traders said. [ID:nN12127303]
<-------------- ----------------------------------------------
  Graphic on record corn crop:
  Graphic on wheat plantings:
 The 2009 soybean harvest was forecast at a record 3.361
billion bushels, which also topped analyst estimates of 3.338
billion bushels and was up from the last USDA projection of
3.319 billion bushels.
 China has been gobbling up U.S. stocks of soybeans at a
near-record pace, but new global supplies will soon provide
competition. [ID:nN28191952]
 The USDA raised its forecast for soy production for Brazil,
the No. 2 producer, to a record 65 million tonnes.
 Argentina, the third-largest producer, should see
production recover to 53 million tonnes, up 66 percent from
last year, the USDA said.
 Growing stockpiles of the crops in the United States and
other parts of the world bode for lower prices, analysts said.
 "There is considerable downside risk for prices through
2010," said Brian Basting, analyst for Advance Trading.
 It may not be the last word on the 2009 crop. The USDA said
it may still make further revisions to the estimate in its
March 10 report because unusually wet weather left significant
acreage unharvested. [ID:nDAT003426]
 "I'm not sure you've got the biggest bean yield yet. I
think once this crop is all put away and everybody looks back
that you're probably even bigger than the USDA says," said Roy
Huckabay, analyst with The Linn Group.
 The news hit share prices of major North American
fertilizer companies. Potash Corp POT.TO was down 4.7
percent, Agrium Inc AGU.TO down 3.4 percent and Mosaic Co
MOS.N down 6.9 percent. [ID:nN12127456]
 Shares of seed and chemical companies were also lower, on a
day when the overall stock market was down slightly. Monsanto
Co MON.N was down 2.7 percent, the farm equipment dealer
Deere and Co DE.N down 4.8 percent and grain giant Bunge
BG.N down 3.1 percent.
 The harvest delays for corn and soybeans combined with poor
prices led to the smallest winter wheat plantings in 97 years,
the USDA said, releasing its first estimate of seeded acreage,
which was far smaller than traders had expected.
 Winter wheat plantings for 2010 were estimated at 37.097
million acres (15.013 million hectares), below analysts'
average estimate of 40.501 million acres, and down 14 percent
from 2009. The USDA projection was below the lowest trade
estimate of 38.387 million acres.
 Farmers could be heading for the smallest winter wheat crop
since 1991's 1.372 billion bushels. The plantings estimate
implies winter wheat production in the range of 1.3 billion to
1.4 billion bushels using five-year average yields and
abandonment rates, according to Reuters calculations.
 "The price of wheat was really down," said Ricky Cornutt,
an Alabama farmer, who reduced his wheat plantings to 100 acres
from 300 acres when he planted in October.
 "We just decided with the price wasn't worth it," he said.
 The smaller plantings may eventually support new-crop wheat
futures, but the glut of wheat and corn on the world market
will pressure prices in the near term, analysts said.
 March wheat futures WH0 were down 7.8 percent at
$5.27-3/4 per bushel on Tuesday.
 The USDA has projected U.S. exports from the 2009 crop will
be the smallest in 38 years, hampered by competition from
Russia and Canada.
 Wheat stocks were projected at 976 million bushels -- the
highest in more than 20 years -- above estimates of 914 million
and up from previous USDA estimates of 900 million.
 The USDA will release its first projection of 2010 corn and
soy plantings in February.
 The lowest acreage means there will be more room to plant
corn and soybeans in 2010, said Rich Feltes, director of
research for MF Global, in a note to clients.
 "Bottom line -- today's crop report is a boom for index
funds that need to buy more grains," Feltes said.
 (Additional reporting by Sam Nelson in Chicago, Christopher
Doering and Charles Abbott in Seattle; Graphics by Jasmin
Melvin; Editing by Jim Marshall, Lisa Shumaker and David