U.S. corn futures are expected to start at 33-month highs Monday on increased concerns federal forecasters will slash their supply outlook in a monthly crop report.

Traders and analysts predict for corn for May delivery, the most-actively traded contract, will start 10 to 15 cents a bushel higher at the Chicago Board of Trade. In overnight electronic trading, the contract gained 12 1/2 cents, or 1.7%, to $7.48 1/2 a bushel.

Driving prices higher are worries about strong demand that has drained supplies. The U.S. Department of Agriculture on Friday will update its forecast for end-of-season supplies, known as ending stocks, and could make a significant cut after reporting last week that inventories as of March 1 were tighter than expected.

"The agency is likely to trim 100 million to 150 million bushels off its forecast of ending stocks, leaving less than a four-day supply at the end of the marketing year on Sept. 1.," said Bryce Knorr, analyst for Farm Futures, an agricultural publication.

Supply worries have overwhelmed projections for an increase in plantings this spring and pushed prices as high as $7.50 overnight, near the record high of $7.65 from June 2008. It wouldn't be surprising to see prices set new all-time highs, traders said.

Traders and analysts agree there is a strong risk USDA will slash its season-end supply forecast Friday. Country Hedging, a brokerage firm, said federal forecasters could drop the projection to less than 500 million bushels from last month's estimate of 675 million, which was a 15-year low.

"The function of the market will be to ration demand for the balance of the year and buy acres into spring planting," said Charles Soule, analyst for Country Hedging.

Traders worry the country may struggle to rebuild end-of-season supplies in the next crop year if poor weather disrupts planting this spring. Frequent episodes of rain, especially over southern and eastern areas of the Midwest, "will slow fieldwork and planting and could initiate some flooding," according to Telvent DTN, a private forecaster. The U.S. is the world's top corn exporter.