The United Nations has added its voice to the chorus predicting lower global wheat output this year, after two years of strong harvests which have pushed stocks to a seven-year high.

The UN's Food and Agriculture Organisation said that weaker sowings in Argentina, Australia, Canada and the US would more than outweigh a rise in European Union plantings.

 "A reduction in the global wheat harvest is likely in 2010 after the record crop in 2008 and the near-record again last year," the FAO said in a report on crop prospects.

A decline would follow a second season of strong production in 2009-10, with the organisation raising its estimate for the harvest by 5m tonnes to 683.2m tonnes, only 600,000 tonnes short of the 2008 high.

The strong output had left stocks on course to end the season up 10% at 523m tonnes.

Price impact

The outlook, on which the FAO declined to support with numbers, follows expectations from organisations such as the International Grains Council and a range of financial analysts that weak market prices would discourage farmers in many countries from sowing wheat.

US winter wheat plantings fell to their lowest since 1913.

Expectations are also growing of a sharp decline in Australia, where a srong currency has compounded the impact of the weak global wheat market on local prices. 

Argentine recovery 

However, the FAO forecast that there may be rise in global coarse grain output this year, thanks to the recovery in Argentina's harvest.

Buenos Aires has said production may be on course to jump by up to 60% from last year, when crops were damaged by drought.

The agency pegged global coarse grain production in 2009 at 1.11bn tonnes, a decline of 2.4% year on year, and reflected in a small decline in world inventories.