The United States, long the breadbasket to the world, is expected to confirm that its grain stockpiles are the lowest in years, darkening hopes for any quick relief from surging global food prices.

The U.S. Department of Agriculture was expected to show in its monthly crop report a further deterioration in supplies at home, and to forecast how severe weather was hurting harvests from such powerhouses at Argentina and Australia.

World grain markets have been surging on bad weather and rising demand. With this backdrop, governments around the world are increasingly worried about food inflation after the UN Food and Agriculture Organization recently said international food prices have topped the previous record set in 2008.

Forecasts for year-end inventories of U.S. corn — used to make food, feed and fuel — were expected to fall nearly 8 percent to 10.1 billion bushels, the lowest level in a decade and a half, according to analysts' estimates.

In the report, the USDA will likely add to the gloom with further details of the impact of searing drought in Argentina, one of the world's biggest exporters of soybeans and corn.

Forecasts for Australia's wheat crop are also expected to be dire as the country struggles with massive flooding.

With 2010 expected to be one of the warmest on record and which saw floods in Pakistan and drought in the Black Sea wheat belt, world farm stocks were already strained.

China Demand Booms

Chinese demand is expected to lead to the fifth straight monthly cut in U.S soybean ending stocks in the report, according to analysts, with stockpiles falling to 156 million bushels, down from USDA's last estimate of 165 million.

A bright spot on the horizon could be that higher prices should drive U.S farmers into the fields to plant more crops. World wheat production could be on the rise in the United States and elsewhere.

Analysts are expecting the USDA to show a 10 percent rise in U.S. winter wheat acres planted from last year, meaning a sharp increase in supply if weather remains favorable.

An increase had been expected after Chicago wheat futures surged to a two-year high in August when drought withered Russia's big crop, prompting the country to suspend exports.

American farmers also are looking to substantially boost sowing of corn and cotton this year to take advantage of high prices, according to a Reuters survey released on Tuesday.

A random survey of 436 farmers and ranchers at the American Farm Bureau Federation's annual meeting found they plan to increase wheat plantings by nearly 25 percent, with some farmers planting thousands more acres than last year.

Increases also were predicted for cotton, up 11.5 percent, and corn, increasing 4.3 percent. The sole decrease was 1.9 percent for soybeans.

"There is going to be a large, large net increase in the top four or five crops," said Rich Nelson, analyst with Allendale, a research firm and brokerage.