US officials may have overestimated harvests

Official statisticians may have overestimated the size of the US corn and soy harvests, a leading agricultural academic has said following analysis of last week's barrage of crop reports.

Washington's assessment of an annual rise of 862 million bushels in US corn stocks appears small against a 1.06-billion-bushel increase in estimated production of the grain, University of Illinois economist Darrel Good said.

The data implied a rise of 6.5% in use of corn by US livestock farmers - a "large increase" which was "counterintuitive" given livestock sector woes and increasing competition from distiller's grains, a byproduct of bioethanol plants used as an animal feed.

For soy, USDA's estimate of a 61-million-bushel rise year-on-year rise in US inventories as of the beginning of December appeared small given a 322-million-bushel jump in supplies.

While buoyant exports had soaked up much of the extra crop, Good highlighted a doubling to 185.3 million bushels in the amount of soy put down for seed, feed and residual use - a figure which beat the 2003 record by a margin.

However, harvest doubts might offer some comfort to crop markets, which have suffered heavy declines since last week's USDA reports raised estimates for corn, soy and wheat supplies.