Chicago corn soars above $5 on bullish data

SEOUL (Reuters) - Chicago corn futures surged more than 3 percent to a fresh 11-year high early on Monday, following a bullish government crop report, traders said.

March corn CH8 on the Chicago Board of Trade was up 13-½ cents, or 2.73 percent, at $5.08-½ per bushel by 0129 GMT, after rising as much as 3.2 percent to $5.10-3/4.

"The U.S. government data has reignited the rally in grain markets, which were already volatile due to a weaker dollar and inflation concerns," said a trader at an international grain house.

"But recent rally is too stiff. Buyers are in a panic."

The U.S. Department of Agriculture reported on Friday that commercial grain firms and farmers held 10.269 billion bushels of corn on December 1, 2007, below estimates ranging from 10.437 billion to 10.719 billion.

That resulted in the USDA reducing its 2007/08 U.S. ending stocks projection to 1.438 billion bushels from 1.797 billion.

The data pushed up many Chicago corn futures by the 20-cent trading limit on Friday.

Goldman Sachs expected that corn inventories will decline in the 2008/09 crop year as demand remains on track to rise at the same time that an expansion in supply is likely to prove difficult, the investment bank said in its report on Friday.

(Reporting by Kang Shinhye; Editing by Sei Chong)