Top-quality milling wheat could be at a premium this year, with early harvest samples in the USA showing poor protein results, according to analyst Rabobank.

Spring wheat and durum plantings were also dramatically lower in Canada due to flooding, so values for high-quality milling wheat looked set to rise, said its latest report. “A lot will now depend on US spring wheat-growing conditions in coming months. The global wheat market may not be as benign as the past two seasons.”

World supply and demand would be more balanced than expected, with Rabobank claiming the US Department of Agriculture’s recent forecast was overstated by 8m tonnes. It now pegged world wheat production at 660m tonnes – 3% down on last year but still the third largest crop on record.

Hot, dry weather across northern Europe and winter kill in the Black Sea region could force further cuts in EU forecasts, it added. “Supply in the EU is tighter than anticipated due to a strong export performance in the first half of 2010.”

With the EU granting 600,000t of export licenses for old-crop wheat last week, and good demand for UK wheat to the near Continent, spot and harvest values remain steady.