LARGER-than-expected wheat, corn and soybean crops in the US forced Australian wheat prices down $12 a tonne in a single night last week.

Chicago Board of Trade wheat prices fell 6.4 per cent when the US Department of Agriculture released its latest crop report, and Australian prices followed the downward trend.

CBH Group wheat trading manager Chris Brown said the US market was taken by surprise with a 5.8-million tonne rise in the local corn crop to 334 million tonnes, a larger-than-expected jump in US wheat stocks for 2009-10 and a smaller area sown to winter wheat.

Mr Brown said the trade was also expecting a lower soybean crop than that forecast by the USDA.

With soybeans intrinsically linked to the corn market, and corn, in turn, having an impact on wheat through the feed market, prices felt the brunt of bigger US crops.

The USDA increased its forecast of world wheat production by 2.3 million tonnes to 676.1 million tonnes, largely due to a larger Russian crop.

Global wheat production will still outstrip consumption by more than 30 million tonnes this season.

The USDA has forecast world stocks of wheat to rise 4.7 million tonnes to 195.6 million tonnes in 2009-10.

It represents a stocks to use ratio of 30 per cent, or 15.8 weeks' supply, one of the highest in eight years. It reflects a steady build-up in grain supplies, which has an adverse impact on farmers by depressing prices.

Mr Brown said world wheat stocks of 196 million tonnes were now at similar levels to what they were at the start of last decade.

He said that with plentiful stocks in the US, Russia and the European Union, and good crops predicted in the northern hemisphere for 2010-11, Australian farmers could expect prices to remain similar.

"The supply outlook (for wheat) is looking burdensome," he said.

"If the season turns out to be anywhere near what the market expects, then we've still got plenty of grain supply for the market.

"There is nothing on the horizon that will see a shortage of crops.

"As a result, there is no fundamental reason for wheat prices to rally for the year."

USDA estimates of this season's Australian wheat crop remained unchanged on 22.5 million tonnes.

Apart from Russia, USDA production forecasts for all other major wheat producers remained unchanged from last month.