CHICAGO—U.S. corn prices have fallen to the lowest level in four years as expectations of a record harvest mount.
The nation's corn crop is in prime health thanks to near-perfect weather this year, and farmers could see the highest yields in history, according to forecasts by the U.S. Department of Agriculture and a handful of private firms.
"We've reached a point where supply is swamping demand, and because of that we're having a price adjustment like we haven't seen for years," said Don Roose, president of U.S. Commodities, a brokerage in West Des Moines, Iowa.
Corn for delivery in September fell to $3.35 3/4 a bushel last week, the lowest closing price since June 29, 2010, on the Chicago Board of Trade.
The USDA predicts the U.S. will produce 14.03 billion bushels of corn this year, eclipsing last year's record of 13.93 billion bushels. This is despite farmers planting fewer acres this year. Corn acreage in the spring was down 4% from a year earlier to 91.6 million acres.
A mild summer and the right amount of rain at the right time have boosted yields. Much of the Corn Belt, stretching from North Dakota down to Kansas and across to Ohio, had favorable growing conditions in August that aided late-season plant development.
The USDA pegs average U.S. corn yields at a record 167.4 bushels an acre.
"The weather turned out to be almost ideal," Mr. Roose said.
The quality of the corn has been good, too. Roughly three-fourths of U.S. corn was in good or excellent condition as of the last week in August, the highest percentage for that time in 20 years, according to the USDA.
The corn boom is likely to add to U.S. stockpiles of the grain, which are already high. The USDA projects corn stockpiles next year will jump to 1.808 billion bushels, more than double what was in storage just two years ago and the highest level since 2006.
The U.S. is the world's largest corn grower.
"Eventually, we're going to have to send a signal to the world farmer," said Charlie Sernatinger, an analyst at EDF Man Capital in Chicago. "Don't plant any more corn. There's too much hanging around."
Still, the actual harvest could fall short of forecasts if the weather stops cooperating. On Friday, corn futures rose 3.2% to end the week at $3.46 1/2 a bushel, in part due to concern that cold weather could threaten the crop in parts of Minnesota, Iowa, Wisconsin and the Dakotas.
"If we get an early frost there may be some yield reductions," said Dustin Johnson, a broker and analyst for EHedger LLC, a futures firm based in Clarendon Hills, Ill. "That's the only thing that could hurt yields at this point."
The USDA is scheduled to update its corn forecasts on Thursday.