Grains failed to hold on to gains after monthly revisions to official data left estimates for US stocks of main farm commodities lower than analysts had expected.

Corn added 1% in early deals in Chicago, and soybeans and wheat 2%, after the US Department of Agriculture came in with monthly data viewed by analysts at broker Benson Quinn Commodities as "slightly friendly".

The USDA raised its estimate of American corn stocks at the end of 2009-10 by 100m bushels, half the amount some analysts had expected, and failed to raise its forecast for soybean inventories at all.

Higher hopes for soybean exports, pegged at a record 1.45bn bushels, would cancel out the impact of fuller silos than expected in March, as USDA data last week showed.

'Biggest surprise' 

For wheat, the USDA cut its year-end stocks estimate by 51m bushels to 950m bushels, significantly more than traders had expected.

"Exports are projected up 40m bushels based on the strong pace of grain, flour, and product shipments in recent weeks, current outstanding sales, and reduced export prospects for some key competitors," the USDA said.

The wheat export figure was the report's "biggest surprise", Benson Quinn said.

Weather factor 

However, corn led grains into reverse as crude oil, a key indicator for a crop used in making biofuels, slid more than $1 a barrel, while weather indicated good weather ahead for US spring sowings.

"The dominant factor is the weather, and it is capping any corn rallies," Darrell Holaday at Country Futures said.

"The weather conditions are allowing for substantial field work and planting progress."

'Unrealistic' forecast 

Furthermore, some analysts questioned the USDA's assessments, particularly estimates for domestic usage of the grain.

Estimates for consumption in the second half of the crop year were "unrealistic, considering the still-low livestock inventories and export shipments which are continuing to run well behind what is needed to reach the USDA's new target", Rabobank said.