US wheat inventories are to top 1bn bushels for the first time since the 1980s as Americans limit bread consumption following two years of strong harvests.

America's wheat stocks will end the 2009-10 crop year at 1.001bn bushels, the US Department of Agriculture said, adding 20m bushels to its forecast.

While USDA officials left their estimate for the harvest unchanged, as had been expected, they lowered their forecast for consumption of the grain, citing improved milling technologies and American's waning taste for wheat-based foods.

"High flour extraction rates for a second straight year are reducing the amount of grain needed to produce flour," the department said in its monthly global crop supply and demand report, a key feature of the commodities calendar.

"At the same time, declining per capita consumption is reducing demand for flour and wheat."

'Very negative'

The data was viewed as "bearish" for wheat prices by Vic Lespinasse, the GrainAnalyst.com market watcher, who added: "This would be the first time the wheat carryover has exceeded 1bn bushels in over 20 years."

The report also raised estimates for global stocks at the end of 2009-10, by 1.9m tonnes to 196.8m tonnes, reflecting higher than expected inventories in Russia left over from previous years.