The U.S. Department of Agriculture's forecasts for corn and soybean plantings this spring fell below analyst expectations, sending futures prices for both upward.
Smaller-than-expected plantings of the two main cash crops in the United States would heighten concerns about global food and animal-feed supplies after importers and domestic processors loaded up on grain and oilseeds earlier this year. The United States is the world's biggest corn exporter and the No. 2 soybean supplier.
With soybean prices hovering at the highest levels in more than six years and corn prices at the highest in more than seven, analysts had expected record combined acreage of both crops.
Farmers plan to sow 91.1 million acres with corn this year, the most since 2016, and 87.6 million acres with soybeans, the most since 2018, the USDA said last week in its first official, survey-based 2021 outlook.
Both figures fell below nearly all the estimates in a Reuters poll of analysts.
Some analysts expressed disbelief at the USDA forecasts, noting growers had strong incentives to expand acreage after struggling with the U.S.-China trade war and low crop prices in recent years.
U.S. soybean stocks are projected to shrink to a mere 9½ days' supply ahead of the next harvest, according to the latest USDA forecast, while end-of-season corn supplies were seen at a seven-year low.
"We just can't afford that bean-acreage number," said Jim Gerlach, president of U.S. broker A/C Trading. "We've got to pull some acres out of a hat somewhere."
Analysts had been expecting the report to show that farmers intended to plant 93.2 million acres of corn and 90 million acres of soybeans, according to the average of estimates gathered in a Reuters poll.
American Soybean Association economist Scott Gerlt said the USDA's March planting intentions report has a good track record in terms of predicting final acreage. However, he said of Wednesday's report, "This could easily be an intentions report that has a higher than normal error."
Wheat-planting intentions topped expectations at 46.4 million acres, above a trade estimate of 45 million acres and up from 44.3 million acres last year, mostly due to an expansion of winter wheat seedings.
The USDA will release its first production estimates for the 2021 crops on May 12.
The agency is scheduled to release revised acreage estimates on June 30, once planting is mostly complete.
In a separate report Wednesday on quarterly grains stocks, the USDA said soybean stocks as of March 1 thinned to the lowest level in five years while corn stocks hit a seven-year low. The agency polled about 8,300 commercial grain facilities and about 78,900 farmers in its final look at U.S. grain supplies before planting begins in a few weeks.
On- and off-farm soybean stocks were estimated at 1.6 billion bushels as of March 1, down from 2.3 billion at the same point last year, the USDA said. Corn stocks were pegged at 7.7 billion bushels, down from 8 billion a year earlier.
Analysts surveyed ahead of the report expected soybean stocks, on average, at 1.5 billion bushels and corn stocks at 7.8 billion bushels.
Meanwhile, the U.S. government vowed to continue battling what it sees as significant trade barriers that are harming farmers, and singled out China as the "world's leading offender" in creating overcapacities in several sectors.
The U.S. Trade Representative's office cited continued concerns in the agricultural arena, including "non-science-based regulatory measures, opaque approval processes for products of agricultural biotechnology, burdensome import licensing and certification requirements, and restrictions on the ability of U.S. producers to use the common names of the products that they produce and export."