Weak prices look likely to prompt a "marked decline" in Australian sowings of the grain, despite rains which have improved hopes for crop production, a US report has said.

Rains since Christmas have "improved the water supply outlook somewhat" for 2010-11 in a country where farmers in many parts continue to be dogged by lack of soil moisture, two years after a nationwide drought sent crop production tumbling.

"Early indications for [the] 2010-11 wheat crop, which is yet to be planted, points towards a marked decline in planted area," US staff in Canberra said in a report back to Washington.

Growers will instead opt for more break crops, such as chickpeas, field peas or rapeseed, of which Australia in 2009-10 enjoyed its best harvest in a decade.

"The area required for livestock production is also expected to increase, albeit marginally," the report added.

Global trends 

A turn away from the grain in Australia, the world's fourth biggest wheat-exporting country, would follow a slump in US plantings of winter wheat to their lowest since 1913, thanks to the soft market and corn and soybean harvesting delays which left field tied up late with standing crops.

Argentine wheat plantings, already at their lowest in a century, are also forecast to fall further.

However, sowings for 2010-11 in China, the European Union and India, the world's top three producers, are set to rise, the International Grains Council said last month, while pegging global output down 21m tonnes at 653m tonnes.

Barley upgrade 

In the EU, the turn to wheat has been driven in part by even worse prospects for barley, whose price has fallen in the region to levels offered by intervention buying.

"The sharp upward revision for the 2009/10 barley crop has largely been driven by a sharp upturn in assumed yield," the report said, with the harvest coming in at 1.85 tonnes per hectare.

"The larger-than-expected 2009-10 barley crop combined with low world barley prices have significantly dampened domestic barley prices," the briefing added, without issuing a forecast as to any impact on 2010-11 planting prospects.