Crop prices jumped, taking corn and soybeans to two-year highs in Chicago, after a barrage of data from US officials signalled further tightness in farm commodities, and beyond that markets had already factored in.
Corn and soybeans surged the maximum allowed by exchange rules in early deals in Chicago. Both crops ended 4% higher at two-year closing highs, with wheat gaining 1.5%, its first positive close in a week.
In Paris, wheat jumped 2.8% to E261.00 a tonne at one point, also a two-year top, with an upgrade by France to its wheat export forecast also lending support.
The price rises followed a string of estimates from the US Department of Agriculture cutting crop supplies, reflecting factors from strong demand for corn from bioethanol plants to Argentina's drought.
USDA itself, in unusually direct language, said that corn "cash and futures prices are expected to strengthen".
'Critically tight'
Jaime Nolan at the European office of FCStone, the US broker, said that the "bullish trend" in crop prices "remains fully intact".
At US-based Country Futures, Darrell Holaday said: "Overall, all of the numbers were supportive to all of the grains with every number a little supportive."
In London, Macquarie analysts said that data highlighted "what can be best described as critically tight US and global corn and soybean balances".
The bank forecast a "surge" in corn prices to pare consumption back to the level of supplies, with markets needing to "ration soybean demand immediately" too.
Corn squeeze
Analysts seized primarily on the USDA's estimate that the domestic corn stocks would more than halve to 745m bushels at the close of the 2010-11 crop year, a cut of more than 90m bushels on its previous forecast, and a deeper downgrade than the market had expected.
The revision reflected data showing a deeper drop in corn inventories heading into 2011 than anticipated, a cut of 1.5 bushels per acre in the estimate for the American corn harvest, and a lift of 100m bushels in expectations for the amount of the grain processed by bioethanol plants.
The figure leaves corn stocks on course to end 2010-11 at a historically tight level of 5.5% of consumption, a figure beaten only in recent times in 1995-96.
The stocks-to-use ratio, which for corn stood at 13.1% at the close of last season, is a key measure of the availability of a crop's supply, and therefore of the prices it can command.
'Reduced competition'
However, the estimate for US soybean inventories at the close of the season was also cut by more than expected thanks to an unforeseen downgrade to the American yield figure.
USDA wheat, soy estimates, change on last and (on market forecasts)
At 140m bushels, soybean stocks in America, the top producer and exporter of the oilseed, are now on course to fall below last season's.
For wheat, the USDA also reduced its estimate for year-end inventories more deeply than the market had forecast, reflecting a lift to export prospects.
America faced "reduced competition, with lower foreign supplies of milling quality wheat", the department said.
Argentine hit
Indeed, production in Australia, whose harvest has been dogged by rains, was pegged 500,000 tonnes lower at 25.0m tonnes, with the export forecast dropped 1.5m tonnes to 13.5m tonnes.
Other key revisions for estimates of foreign crops included a 1.5m-tonne cut apiece to forecasts for corn and souybean output in dryness-plagued Argentina.
