U.S. corn and soybean futures keep rising since yesterday, January 12, following a surprise cut in production estimates in the latest WASDE report from the U.S. Department of Agriculture.

In the latest world supply and demand report, the USDA cut its estimate for the U.S. domestic corn crop to 13.73 billion bushels and its outlook for soybean production to 4.28 billion bushels, attributing the unexpected production cuts to a reduction in harvested area, which boosted futures for the two agricultural commodities.

The report also downgraded its outlook for corn and soy production in drought-hit Argentina, where some traders said more cuts were warranted.

On the Chicago Board of Trade, corn (C_1) front month contract for March delivery settled +2.3% to $6.71/bushel on January 12, March soybeans (S_1), consequently, ended +1.7% to $15.18 1/2/bushel, and March wheat (W_1) closed +0.4% to $7.42 3/4/bushel.

Meanwhile, the USDA reported less corn, soybeans and wheat inventories than expected, with corn stocks totaling 10.8 billion bushels, soybeans at 3.02 billion bushels and wheat at 1.28 billion bushels, all three commodities down on an annual basis. The latest forecasts coincide with concerns about tightening global grain supplies and rising food prices.