U.S. corn stocks should be rapidly rebuilt by flat domestic demand for the grain's use in ethanol production, the U.S. Department of Agriculture's chief economist said Thursday, which will likely pressure prices.

"With the area planted we expect a record production and a substantial rebuilding of corn stocks which should help with market volatility and bring down prices significantly," Joseph W. Glauber told the International Grains Conference in London.

He said that the major reason behind the expected stock-building was that corn's use in ethanol has flattened significantly, with the percentage use of the upcoming crop likely to be around 36%.

Mr Glauber added that the weather was still dry in the panhandles of Texas, which were hit by drought last year, but that broader concern has shifted to such conditions in the Midwest, despite it being very early in the season.

Write to Michael Haddon at michael.haddon@dowjones.com

(END) Dow Jones Newswires

June 07, 2012 05:42 ET (09:42 GMT)