The US inventory data which sent crop prices tumbling may not have been as negative as investors believe, setting up the prospect for surprises in an official report on Friday, a leading agricultural academic has said.

Corn and soybean prices tumbled by some 3% last Wednesday after the US Department of Agriculture said that America's inventories of the crops at the start of last month were higher than investors had expected.

However, analysts' forecasts for soybean stocks of some 1.2bn bushels were "misguided", and failed to take account of a rare export effect, University of Illinois economist Darrel Good said

The pace of US exports so far in 2009-10 was still on track to take full-year shipments to levels in line with official forecasts.

"Ironically, year-ending stocks could be smaller than the current US Department of Agriculture projection of 190m bushels, not substantially larger as implied by the market reaction to [last week's] stocks estimate," he added.

Corn question 

For corn, the implications of the report were more difficult to judge, and depended on the pattern of demand from livestock farmers, who appeared to have used about 1.48bn bushels in the December-to-March quarter.

However, the last two years had seen use more heavily weighted towards the autumn and winter months.

Extending that trend to 2009-10 suggested consumption some 400m bushels lower than the USDA estimate, inferring indeed the build-up in corn stocks many investors have bargained on.

Unusually significant

More insight will be gained on Friday, when the USDA's latest monthly global crop supply and demand will reveal its own thinking on corn and soybean stocks.

"The USDA's April update of projected use and ending stocks of US corn and soybeans typically has modest implications," Mr Good said.

"This year could be different."