Corn prices surge to 30-month high

Corn surged to the highest price in almost 30 months after the US government lowered forecasts for domestic inventories, tightening global food supplies after adverse weather slashed harvests. Wheat also climbed.

March-delivery corn rose as much as 1.7% to $6.42 a bushel on the Chicago Board of Trade, the highest price for a most-active contract since July 2008.

The grain was at $6.3675, adding to Wednesday’s 4% jump. The US Department of Agriculture cut its estimate of the country’s 2010 corn harvest, forecasting a global production deficit of 20.1 million metric tonne, 17% more than it expected in December.

Corn stocks in the US, the world’s largest grower, will fall to 745 million bushels (18.9 million tonne) before this year’s harvest, the smallest since 1996, the USDA said.

The US stockpiles will be “extraordinarily tight,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said. “Those tight stocks prompted record US corn prices a few seasons ago.”

Corn futures surged to a record $7.9925 a bushel in July 2008 as global supplies of the grain and other cereals including rice and wheat tightened.