WASHINGTON — Near-record heat and worsening drought have failed to dampen production of the nation's corn crop, the Agriculture Department reported Friday.

The corn forecast improved in the monthly crop report, which said farmers will produce 10.98 billion bushels, up 236 million from last month's projections.

The report defied the predictions of many analysts who expected drought to result in lower national numbers. The reason is that yields appear to be better, said Keith Collins, the department's chief economist.

Corn yields should average 152.2 bushels an acre, up 4.3 bushels from last year. If realized, this year's yields would be the third-best on record, analysts said.

Soybeans are a different story. Yields are expected to drop from last year's record highs, and high temperatures and drought have worsened the outlook in the western Corn Belt as well as the Great Plains and Gulf Coast. Soybean production is forecast at 2.93 billion bushels, down 5 percent from last year's 3.1 billion bushel crop.

Not since the Dust Bowl has July been so hot. Average temperatures were 77.2 degrees nationwide last month, compared with 77.5 degrees in July 1936. Dryness also approached records in the lower 48 states, which experienced the driest conditions from May through June since 1988.

Prices are stronger for the nation as a whole and should compensate for lower yields and keep production values close to 2005 levels.

Friday's crop report offered the first survey-based forecasts of the year for corn, soybeans and rice, based on interviews of 27,000 farmers and visits to farm fields.

The report also said:

• The forecast for rice production is 197.2 million hundredweight, down 26 million hundredweight from last year. Prices improved 10 cents to $9.25 to $9.75 per hundredweight.

• The cotton crop should be 20.4 million bales, down 14 percent from last year's record 23.9 million bales.

• The wheat production forecast of 1.8 billion bushels is down 14 percent from last year's 2.1 billion bushels. The price forecast improved 20 cents to $3.90 to $4.50 a bushel.

The outlook also improved for meat. Analysts raised the forecasts for beef and chicken production as well as price forecasts for cattle, chickens and hogs. The pace of beef exports has picked up with strong sales to Canada and Mexico.

For milk production, intense heat has reduced yields and boosted prices, according to the report.