Farmers are on pace to produce the second largest corn crop and fourth largest soybean crop in history, the government said Tuesday.

 

In its first estimates this year based on actual field visits and farmer surveys, the U.S. Department of Agriculture raised its estimate of corn production and said improved weather has helped Midwestern farmers recover from June's devastating floods.

 

That recovery is expected to lead to lower prices for corn, soybeans and wheat, providing some relief to meat producers who use corn and soybeans for feed and for makers of corn-based ethanol.

 

The department forecast that farmers will harvest 12.3 billion bushels of corn, up more than 570 million bushels from last month's estimate of 11.7 billion. That's down 6 percent from last year's crop of 13.1 billion bushels.

 

Average corn prices this year are expected to drop to $4.90 to $5.90 per bushel, down 60 cents from last month's forecast of $5.50 to $6.50.

 

The department has lowered its estimate for soybeans a bit, to 2.97 billion bushels from 3 billion last month.

 

Still, soybean prices are also expected to fall to $11.50 to $13 per bushel, down 50 cents from $12.00 to $13.50 last month.

 

The department also slightly boosted its forecast of wheat production by 2 million bushels, to 2.462 billion, and projected that wheat prices will average $6.50 to $8, down 25 cents from last month.