CHICAGO – U.S. soybean and corn supplies in September will be smaller than previously forecast due to a reduced estimate of last fall's harvest, the U.S. Agriculture Department said on Tuesday.

The crop revisions will intensify fears of shortages around the world this year, after governments tried to lock in extra food supplies amid the COVID-19 pandemic that disrupted global supply chains and thinned U.S. stockpiles.

Concerns about tight supplies have pushed Chicago Board of Trade corn, soybean and wheat futures to multiyear peaks in recent weeks. On Tuesday, corn jumped by as much as 5%, while soybeans added nearly 4% and wheat gained almost 5%. The surge took prices to highs not seen since 2014.

"The U.S. numbers are creating more of the sticker shock, with USDA not only reducing 2020 supplies, or current crop year supplies, but also realizing that demand — especially led by beans — is fairly strong," said Terry Reilly, senior analyst with Futures International.

USDA pegged the 2020-2021 domestic soybean ending stocks outlook at 140 million bushels, down from its December forecast for 175 million, and corn ending stocks at 1.552 billion bushels, down from 1.702 billion in December.

U.S. corn production for the 2020-2021 marketing year was pegged at 14.182 billion bushels and soybean production was pegged at 4.135 billion bushels.

The soybean harvest view fell below the average of market expectations, and corn production missed the low end of a range of analysts' estimates in a Reuters poll.

"Nobody was expecting corn production to drop like that," said Jack Scoville, analyst with the Price Group. "They [USDA] underestimated the damage from the drought and the derecho and probably overestimated some of the better areas."

Chicago Board of Trade (CBOT) March corn ended up the daily 25-cent limit at $5.17¼ a bushel, the highest level for a most-active contract since May 2014. May and June futures were also limit-up, and all three were trading synthetically through options about 8 cents above closing prices.

Corn-trading limits will expand to 40 cents on Wednesday following the limit-up close, CME Group said.

March soybeans jumped 45¾ cents to $14.18¼ a bushel, the highest for a most-active soy contract since June 2014. CBOT March wheat gained 30¼ cents to $6.65 a bushel, the highest since December 2014.

USDA also lowered its forecast for upcoming harvests in key export countries Brazil and Argentina.

Soybean production in top-producer Brazil was pegged at 133.00 million tonnes, unchanged from the previous outlook. Brazil's corn harvest was seen at 109.00 million tonnes. In Argentina, where farmers have struggled with drought throughout the growing season, USDA predicted a soybean harvest of 48.00 million tonnes and a corn harvest of 47.50 million tonnes.

Argentina has moved to curb corn exports, while top wheat exporter Russia is considering raising a previously announced export tax on the grain.