The USDA's latest report on agricultural supply and demand for the 2014-2015 marketing year suggests supplies will continue to be on the tight side for key U.S. crops despite record harvests, the American Farm Bureau Federation said.

"The most interesting feature of today's World Agricultural Supply and Demand Estimates Report is the projected corn yield of 167.4 bushels per acre," Farm Bureau Deputy Chief Economist John Anderson said. "That is up from 165.3 bushels per acre a month ago, which pushes projected U.S. corn production to just over 14 billion bushels. That's a record."

Increases in projected corn use largely offset the higher production, leaving stocks projections almost flat at just 7 million bushels above last month's estimate, Anderson said.

Prices are expected to trend upwards even so, since earlier forecasts had put production at about 170 bushels per acre. "Projected corn production of 14.032 billion bushels is still massive, but it is probably about 200 million bushels below what the market had expected," he said.

The bullish U.S. corn numbers were offset by less favorable world numbers for feed grains and wheat. Global feed grain production estimates, for example, rose by 4.9 million metric tons (MMT) over last month due not just to higher U.S. production, but higher EU corn production and higher barley production in the former Soviet zone, too. Projected global feed grain carryover for 2014-15 rose 2.7 MMT month over month.

Projected global wheat production, meanwhile, rose 10.9 MMT to an expected record 716.1 MMT. Carryover is expected to rise 3.4 MMT as a result.

Soybeans held few surprises as the WASDE yield estimate rose 0.2 bushels to 54.2 bushels per acre. The slight increase in production went straight into carryover, raising projected carryover to 430 million bushels.

Cotton acreage forecasts got significant adjustments, too. Projected harvested acreage rose from 9.7 million acres to 10.24 million acres over the month. Projected yield was up 4 pounds to 820 pounds per acre, adding about 1 million bales to expected production this year.

The USDA consequently raised ending stocks projections from 5.2 to 5.6 million bales, which would result in the largest US carryover since 2008-2009 if realized. Changes in the U.S. cotton market will likely be offset by declining stocks abroad. China, meanwhile, is expected to hold even, exerting continued downward pressure on cotton prices.