LONDON, England - January 13, 2011 - Corn surged to an almost 30-month high in morning trading, after the U.S. government cut forecasts for domestic inventories, tightening global food supplies, after adverse weather slashed harvests.

The price of wheat also climbed.

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

The contract extended yesterday’s 4% jump and traded at $6.375 by 7:00 a.m. London time.

The U.S. Department of Agriculture (USDA) lowered its estimate on the country's corn harvest last year, widening the global production deficit by 14% to 20.1 million metric tons, from 17.2 million metric tons in December.

Stockpiles before this year’s harvest from the U.S., the world’s largest grower and exporter, will fall to 745 million bushels, the smallest since 1996, the USDA said.

U.S. stockpiles will be “extraordinarily tight,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report. “Those tight stocks prompted record U.S. 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. Concerns of food shortages sparked protests from Haiti to Egypt.