(Bloomberg) -- Corn futures for December delivery may plunge 14 percent before the U.S. harvest as early planting and a jump in acreage improve crop prospects, said Bill Nelson, a senior economist for Doane Agricultural Services Co.

“We are looking for fairly good corn yields this year,” Nelson said at a client conference in Chicago. The December contract may slip to $3.25 a bushel in October on the Chicago Board of Trade, compared with today’s close of $3.785, he said.

The U.S. Department of Agriculture estimates 87 percent of the crop was planted as of May 16, compared with 61 percent a year earlier. Farmers may end up planting 89.8 million acres because of the fast start, more than the 88.8 million forecast by the USDA in March, Nelson said.

About 67 percent of the crop was in good or excellent condition as of May 16, based on the first rating of the season. That’s above the first-week average of 66 percent since 1985, which means average U.S. yields may reach 164 bushels an acre, above last week’s USDA forecast of 163.5 bushels, Nelson said.

“When the season’s first corn-crop ratings are above average, corn prices historically fall 15 percent,” based on a study of historical price charts since 1985 of the period from June 1 to October, he said.

Corn futures have dropped 15 percent in the past year on concern that supplies will increase in the U.S., the world’s largest grower and exporter. Inventories of the grain before the 2011 harvest may reach 1.997 billion bushels, compared with 1.818 billion forecast by USDA on May 11, Nelson said.

“In five of the last six years, the USDA has underestimated U.S. corn ending stocks,” Nelson said.

http://www.businessweek.com/news/2010-05-18/corn-may-fall-14-on-early-planting-doane-predicts-update1-.html