The U.S. is likely to produce a record 14.27 billion bushels of corn and 3.25 billion bushels of soybeans in the 2012-13 marketing year, with the large crop pushing down prices for corn, soybeans and wheat, the U.S. Department of Agriculture said Friday.

The output projections were above the USDA's baseline forecasts issued this month, which projected corn output of 14.235 billion bushels and soybean output of 3.215 billion bushels in the year from September 2012 to August 2013. Those projections were compiled in November as part of the government's budget process. In the 2011-12 marketing year, corn output was 12.358 billion bushels and soybean production was 3.056 billion bushels.

Farmers are likely to plant so much corn this year--about 94 million acres, the most since 1944--that production will sharply overshoot demand, pushing up stocks and pulling down prices, the USDA said. Recent high corn prices have also made farmers more likely than usual to plant that crop instead of soy in the next year, analysts say.

Corn ending stocks are likely to double to 1.616 billion bushels from 801 million bushels at the end of the 2011-12 marketing year, "pushing cash prices sharply lower by fall harvest," the USDA said.

"Futures and cash prices for wheat, corn, and soybeans are all expected to fall in 2012-13 as record U.S. corn production pushes global grain supplies to a new record," the USDA said. "Despite the expected decline, prices remain historically high because of strong global demand for grains and oilseeds."

But demand from ethanol producers is falling and that sector won't be buying as much corn. "Falling gasoline consumption and declining ethanol exports limit expected corn use in the production of ethanol," USDA said.

The USDA also forecast wheat production of 2.165 billion bushels, up slightly from a baseline projection of 2.12 billion bushels, and up from 2.0 billion bushels in 2011-12.

Strong crop prices are driving farmers' intentions to plant more this year, the USDA said. "Combined 2012 area for wheat, corn and soybeans is projected to be [a] record high and up 3% from 2011 supported by strong new-crop futures prices and a return to more normal spring and summer weather," it said.

The USDA forecast cotton production of 17 million bales, up from a baseline projection of 16.2 million bales.

The USDA forecasts are subject to change in coming months as they come long before the harvest and the current figures are not based on surveys of farmers.

-By Owen Fletcher and Bill Tomson, Dow Jones Newswires; 312 750 4120; owen.fletcher@dowjones.com

(END) Dow Jones Newswires

February 24, 2012 08:15 ET (13:15 GMT)