WEAK grain prices may lead to an estimated 800,000ha reduction in the area sown to wheat in Australia.

The estiate, by the US Department of Agriculture, put Australia's wheat area at 13 million hectares.

The USDA predicts a 22-million tonne wheat harvest for Australia next season.

Agfarm account manager Sam Heagney said early rain and relatively strong prices would see more canola planted this year in Victoria.

Mr Heagney said 2010-11 crop canola was last week priced at $424 a tonne at Geelong, up from $402 a tonne for 2009-10 crop canola to the same port.

"The long-term outlook for oilseeds is pretty good, although there's a good crop in South America," Mr Heagney said.

"The margin and outlook for canola is just a bit better than wheat and coarse grain."

Mr Heagney said a hefty world wheat supply was putting downward pressure on prices.

He said the 680-million tonne world harvest for the 2008-09 season had boosted stocks.

"The stocks-to-use ratio in 2007 was as low as 17 per cent, the lowest since the 1970s," Mr Heagney said.

"With a forecast 678 million tonne world wheat crop for 2009-10, it's now projected to be closer to 30 per cent."

Wheat prices were about $208 a tonne at Geelong.

Mr Heagney said grain growers were "definitely more positive about the coming crop".

"We've had up to an inch (25mm) of rain in Horsham in the past couple of days," he said.

"Farmers will get one more spray in then they'll start sowing around Anzac Day."

Mr Heagney said while the moisture was currently good, the season hinged on good spring rain.

"They could sow a crop and it will look fantastic until October, then there may be no rain," he said.

"We've been missing a spring the last few years."

Mr Heagney said growers' choices about what to sow was limited by their rotations.

He said the world prices would not dictate choices "as much as it should".

"No one should be growing feed barley, it doesn't make sense," Mr Heagney said.

"The price signals on paper for malt barley look very good, but there's a huge price discrepancy between malt and feed.

"If people can get malt then the rewards are there."

Mr Heagney said while a strong local dairy industry may help feed grain prices, it would not make a significant difference.