But grains came roaring back late on Friday, pulled up by a late rise in corn prices, reflecting in turn the increased consumer confidence in the US.

USDA has made few significant adjustments to its wheat crop estimates. Rather, it has decided to wait until after the release of its September 30 Small Grains Summary report that will include its updated production estimates.

US grains traders are assuming that this report will show a big increase in US spring wheat production, causing ending stocks to soar closer to 800 million bushels.

Wheat on Friday, therefore, pushed to new lows at each of the three US grain exchanges.

Then, late in the day, following corn's lead, prices rallied closing at $US4.50/bus in Chicago.

This sets the stage for a larger short-covering rally next week...if corn continues Friday's late rally.

Arlan Suderman, however, points out that US wheat export sales to date fall short of the seasonal pace needed to reach the USDA's export target by May 31.

This will make it difficult to sustain a wheat price rally long-term without help from the other markets and a significant pick up in demand in the weeks and months ahead.

In Australia, Rabobank has also lowered its wheat price outlook for the next 12 months as world stock levels are likely to build for the second season in a row.

Rabobank says world prices are now at their lowest since April 2007.

Yields and quality in the northern hemisphere harvest are above expectations, which would contribute to a further easing in wheat prices in the second half of the year, Rabobank says.