US officials have, for the first time in nine months, cut their forecast for world wheat inventories, citing better prospects for the grain's use in livestock feed.

The US Department of Agriculture sliced by 950,000 tonnes, to 195.8m tonnes, its estimate for world wheat stocks at the close of the 2009-10 crop year, which for most big northern hemisphere producers ends in June.

The reduction was the first since July, since when the department has raised its estimate by more than 14m tonnes, adding in the equivalent of UK wheat production.

However, the USDA continued to raise hopes for world wheat production, which Friday's data pegged at 678.4m tonnes, 410,000 tonnes higher than the last estimate.

Feed hopes 

The stocks revision reflected "higher wheat feeding expected for Russia, Ukraine and Egypt", the USDA said in its much-watched monthly report listing global crop estimates.

The increases more than offset waning expectations for Europe's demand for feed wheat, which is now forecast to fall by 2m tonnes to 125.5m tonnes for the year.

The report comes a day after the region's compound feed industry group warned that demand from dairy farmers would remain soft this year.

Export fortunes turn

However, the USDA raised hopes for Europe's wheat exports, which it saw coming in at 20.0m tonnes, 1.0m tonnes higher than its last forecast.

The report also increased by 1.09m tonnes the estimate for America's wheat shipments, "based on the strong pace of grain, flour and product shipments in recent weeks� and reduced export prospects for some key competitors".

The USDA cut 500,000 tonnes from export forecasts for both Australia and Russia.

Nonetheless, the department stressed that this appeared only a short-term blip within a long-term trend which has favoured Russia over, in particular, the US in export markets.

"Over the past 10 years, world wheat trade has grown 25%, and Russia has grabbed 70% of that growth," the USDA said.

"This represents a dramatic change for a country that once was a perennial importer of 10m-14m tonnes."