March 31 (Bloomberg) -- Corn futures, off to the best start to a year since 2008, entered a bull market today as the U.S. government said supplies are tighter than expected. Soybeans rose to the highest in nine months.

Domestic inventories on March totaled 7.006 billion bushels, smaller than the 7.098 billion forecast by analysts surveyed by Bloomberg, the U.S. Department of Agriculture said today. Supplies may continue to shrink as growers are poised to sow the fewest acres in four years, the USDA said in a separate report.

Corn has jumped 19 percent this year, surprising banks including Goldman Sachs Group Inc. that were forecasting that prices would extend last year’s 40 percent plunge, the biggest since at least 1960. Instead, futures climbed as U.S. export sales surged, while record cattle and hog futures boosted the outlook for demand in feed rations.

“The March 1 corn supply is a little tighter than people expected,” Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois, said in a telephone interview. “The report was a surprise because it indicates that feed demand was better than expected.”

Corn futures for May delivery climbed 2 percent to settle at $5.02 a bushel at 1:15 p.m. on the Chicago Board of Trade.

David Fuller's view

Here is the Bloomberg report.

Today’s move was impressive because the daily chart of Corn was testing its range lows of the last three weeks near $4.75 this morning, before rallying sharply after the above report was released to close at $5.02.  Additional gains this week would reaffirm the recovery from deeply oversold levels which commenced in January.  Soybeans and Wheat show similarly firm patterns.