* December corn could slide to $4 after July * Forecast for record US corn crop weighs December * July corn seen supported by tight supplies * Soybeans have fundamental support By K.T. Arasu CHICAGO, May 13 (Reuters) - The forecast of a record corn harvest this year in the United States by the U.S. Department of Agriculture last week has set the new-crop December contract on a downward trajectory that could take the price to $4 per bushel, analysts said. The December contract, the first month to typically reflect the year's corn harvest, fell on Friday to the lowest level in nearly 15 months, closing at $5.05-1/4 after breaking below $5 for the first time in 17 months. A caveat to the downward spiral, analysts said, was weather in the Midwest grain belt during the summer, especially in July when plants pollinate and yields are set. High heat coupled with dry weather could hurt plant development and reduce yields. "New crop corn will be about $4 probably after mid-July," said grains analyst Robert Bresnahan of Trilateral Inc. in Chicago. "A large portion of the crop was planted early and they received timely rains. I see a downtrend (in prices)." The USDA's supply-demand report on Thursday forecast that farmers in the United States will harvest a record corn crop of 14.8 billion bushels, up nearly 20 percent from last year. The department also raised its corn yield estimate to 166 bushels per acre from the trendline projection of 164 bushels, which analysts said was based on its historical trend of revising the yield based on planting progress. But some critics said the USDA was premature in raising the yield by two bushels, especially when the critical development stages of the plants lay ahead in the summer months. "It seems like the USDA has gotten into the weather business. They are forecasting good summer conditions," Scott Irwin, professor of agricultural economics at the University of Illinois in Urbana-Champaign said, jokingly. He also said that the USDA surprisingly dropped the corn yield for 2011 -- when yield fell to 147.2 bushels -- when calculating the 166 bushel per acre yield stated in Thursday's report. "Maybe they considered it an outlier year," he said. CORN DOWN, SOYBEANS UP Investment bank Goldman Sachs also noted the USDA's exclusion of the 2011 corn yield in its calculations. The bank said in a note to clients that the USDA's 166 bushels per acre yield forecast was higher than its own of 160 bushels and "higher than we had expected it to forecast given the historical forecasting methodology, as it decided to exclude the low 2011 yield in forecasting." Goldman Sachs said that while the USDA report would likely weigh on corn prices in the near term, the bank believed "further downside to prices from current levels will be limited until we get a better idea of summer growing conditions." Then bank maintained its six- and 12-month outlook for corn prices to remain at $5.25 per bushel. Traders and analysts said that while corn prices would be under pressure, soybeans would continue to find support from the USDA's forecast for ending stocks in the United States next summer to be the smallest in four years. A drought that devastated the soybean crop in Brazil and Argentina which boosted demand for U.S. supplies was behind the slump in stocks in the United States. "Beans and corn are going to move in opposite directions," said Shawn Hackett, president of Hackett Financial Advisors and publisher of the Hackett Money Flow report. "Corn has already gone from $8 to $5," he said, alluding to spot corn futures rising to an all-time high of $7.99-3/4 per bushel last summer amid concerns over the U.S. weather. He too was expecting December corn futures to slide to around $4 per bushel "in the next couple of months" but added that summer weather would be a crucial factor. CASH CORN MARKETS TO LEAD FUTURES? Traders said while new-crop corn futures head lower, the story in old-crop CBOT contracts could be different story due to a tightening of supplies held-over from last year. Despite the USDA raising its estimate of old-corn ending stocks by 50 million bushels in its report last week to 851 million bushels -- when analysts had expected a decline to 749 million -- traders are pointing to rising basis values in the cash markets as a sign of tight supplies. Some traders estimate that 1 billion bushels of corn from this year's harvest could flow into the supply chain as early as August, but added that they were uncertain if there were enough supplies held over from last year to last until then. "Cash markets always lead futures," said veteran grain trader Glen Hollander, partner at grain merchandiser and brokerage Hollander & Feuerhaken in Chicago. "If demand in cash markets is still there next week, the market will stabilize," he said, adding lower futures prices in the July contract would stall grain sales by farmers. He added that farmers sold plentiful corn recently, adding that exporters and the ethanol sector likely covered their needs for at least two weeks to up to a month.