WORLD wheat stocks have been forecast to end the season at their highest level ever.
In its latest monthly crop report, the US Department of Agriculture estimated ending stocks at 213 million tonnes.
It also increased its estimate of global wheat production by 1.4 million tonnes to 692.9 million tonnes.
At the Grains Research and Development Corporation research update in Ballarat today, Market Check economist Steve Powell said the huge stockpile of wheat was likely to dampen prices this year.
"Given burdensome global wheat stocks, it is difficult to see a significant rise in global wheat prices in the shorter term although domestic basis (domestic prices relative to the international market) may strengthen for some wheat grades in the current season," Mr Powell said in his report.
Mr Powell said the link between corn and wheat was helping prop up wheat prices, particularly with tight corn stocks in the US
The USDA reduced its outlook for US corn stocks by 1.1 million tonnes to 20.4 million tonnes.
It left US corn production and consumption unchanged from the previous month's report but expected more grain to be exported.
The USDA also forecast world production to fall by four million tonnes to 864.1 million tonnes.