The Agriculture Department’s December crop report shows continued tight supplies of corn, cotton and soybeans that will help drive planting decisions next year, according to the American Farm Bureau Federation.

“Grain stocks weren’t reduced as much as we had expected, with USDA only making minor adjustments to the corn, wheat and soybean balance sheets,” said AFBF Economist John Anderson. “USDA did, however, lower its cotton stocks forecast to 1.9 million bales, compared to 2.2 million bales in last month’s report. That’s a drop of 300,000 bales in ending stocks, which is a significant drop given how low stocks already were.”

The USDA report indicates supplies of the three crops will be tight going into the new year. That points to strong demand, higher prices and an increase in corn, cotton and soybean plantings in 2011, according to the AFBF economist.

Anderson said that USDA’s minimal change to the corn stocks forecast was a surprising point from the December report.