SUPPORTED by higher futures markets and a lack of sellers, wheat and barley markets are slightly higher this week.

Wheat for delivery to domestic markets is $5 a tonne higher and wheat for delivery to the ports of Melbourne, Geelong and Portland is $3 a tonne higher.

F1 feed-barley prices are $2 a tonne higher with the benchmark Melbourne price reaching $164 a tonne delivered.

Much of the wheat available to domestic buyers falls short of their quality specifications, so they have to pay more to buy the grade of wheat needed for stockfeed.

Growers in the Western District have been actively marketing their wheat which contains screenings as high as 25 per cent and test weights of less than 70kg a hectolitre.

These parcels of wheat fall outside the specification for the preferred wheat which has a minimum test weight of 70kg a hectolitre and maximum screenings of 10 per cent.

Instead the stockfeed compounders have been able to buy wheat that is either ASW or HSP1.

HSP1 has a specification that includes minimum protein of 11.5 per cent, a minimum test weight of 68kg a hectolitre and maximum screenings of 25 per cent.

Despite the screenings being so high, stockfeed millers are confident they can extract the nutritional quality needed for their rations.

US wheat futures prices rebounded last week. The US wheat market has increased 6.5 per cent in value over the past three weeks, rising to the levels of mid-January.

The monthly report posted by the International Grains Council last week summarised the changes in US wheat markets as being influenced by currency movements and short covering by investor fund managers.

The same report had some sobering forecasts for the grain market. Large production of corn and soya bean are expected in South America and wheat stocks are growing.

Stocks of wheat for the 2009-10 season are estimated to be 32 million tonnes higher than 2008-09 with wheat stocks in the US being particularly large.

Looking ahead to the coming season, the International Grains Council forecast world wheat production at 659 million tonnes, which is six million tonnes higher than their previous estimate but 16 million tonnes lower than last year.

The results of a tender for wheat in Iraq last week was disappointing for Australia.

The tender was awarded to sellers of Russian and Canadian wheat.