Brokers warned investors against overplaying the impact of data showing that US farmers abandoned crop sowings on an area bigger than Belgium, with Societe Generale terming "premature" a jump in grain prices.
Corn prices soared nearly 4% on Thursday, and soybean futures 2%, in a rally stoked by data from the Farm Service Agency, which handles US agricultural support, showing that the unusually wet spring prevented growers planting on 7.71m acres of cropland.
The biggest loss, of 3.41m acres, was in corn area, limiting plantings to 88.5m acres – well short of the 97.4m acres that the US Department of Agriculture has factored in, and implying that the harvest will fall well short of the current 13.7bn-bushel estimate.
For soybeans, the FSA showed plantings of 72.0m acres, with sowings of 1.62m acres abandoned, compared with a USDA estimate of seedings on 77.2m acres.
The data "may be higher than the market was thinking", Richard Feltes at broker RJ O'Brien said, adding that the extent to which USDA officials "have captured and reflected today's data is a subject for debate".
"At face value, today's FSA update suggests that corn, wheat and soybean acres may come down" from the current USDA figures.
'Can be disputed'
However, investors already appeared to be discounting ideas that the full impact of the FSA figures would be passed through to USDA data.
"I hear some calls that USDA's August acres may be overstated by 1.0m acres in corn and 500,000 acres in soybeans," Mr O'Brien said.
FSA data on sowings, prevented sowings and (USDA sowings figure)
Corn: 88.5m acres, 3.4m acres, (97.4m acres)
Soybeans: 72.0m acres, 1.62m acres, (77.2m acres)
Wheat: 49.1m acres, 1.74m acres, (56.5m acres)
Cotton: 7.80m acres, 218,714 acres, (10.2m acres)
Total (includes others): 594.1m acres, 8.69m acres, N/A
And there were many reasons for investors to tread with caution, one being that the FSA data do not cover some large enterprises, which do not apply for farm support, and another that it is unclear how many of the lost acres have already been factored into the official estimates.
"It seems some of the possible losses, mainly corn and soybean in North Dakota, were factored in on the USDA's June acreage report, while other areas have not been addressed," broker Benson Quinn Commodities said.
"The true relationship between these figures and how they compare to [official estimates] can be disputed."
'Very little correlation'
At Country Futures, Darrell Holaday cautioned that the data was open to revision "every month through November", and that the corn sowings estimate while "probably supportive, will change".
Furthermore, history shows that "there just is very little correlation between the August FSA acreage numbers and the acreage used by USDA".
At Chicago-based broker Rice Dairy, Jerry Gidel, Feed Grains analyst, told Agrimoney.com: "This is only one of the inputs that the USDA uses in its plantings estimates.
"Even if we knew that this was the final figure, which we don't, it would be wrong to see this as where the USDA estimate will end up."
'Price rises premature'
An extra cloud has been placed over the accuracy of Thursday's FSA data by an extension this year, because of the wet spring, to the normal July 15 deadline to certify acreage.
This extension could have enabled extra seedings, beyond FSA statistics, Societe Generale analyst Christopher Narayanan said.
"Therefore total acreage may yet be higher than implied by today's report."
Furthermore, historically, the FSA figures "tend to underestimate planted acreage throughout the growing season, lagging the official figures".
"In our view the market reaction today was a bit premature," Mr Narayanan said.