A FURTHER tightening of US corn stocks is expected to continue to hold up global wheat prices.
The US Department of Agriculture's latest World Agriculture Supply and Demand Estimates report released overnight has forecast American corn stocks to end at 21.42 million tonnes, a fall of 600,000 tonnes from the previous month's estimates.
According to Commonwealth Bank's agri commodities analyst Luke Mathews, corn supplies "remain at alarming levels" and should be rationed.
The fall in corn supplies was a direct result of a reduction in the size of the US crop.
The USDA revised the production estimate of the US crop down from the 315.8 million tonnes reported in October to 312.7 million tonnes this month.
The US is the world's largest exporter of corn and, as such, has the bigget impact on the global market.
The impact of corn supplies on the wheat market is highlighted by futures prices and global wheat stocks.
The USDA has estimated world wheat ending stocks at 202.6 million tonnes, a slight increase on the 202.4 million tonnes reported last month.
Mr Mathews said the last time stocks were that high was two years ago.
He said in that year, Chicago Board of Trade wheat futures fell to 425 US cents a bushel – about two-thirds the level of last night’s close of trade, 643 US cents/bushel ($A233 a tonne).