LONDON (Commodity Online) : International Grain Council on Thursday further slashed global wheat output estimate for 2010-11 by 7 m tones to 644m tones.

In its latest report, the IGC however said wheat consumption will hit a record despite soaring prices because of a dearth of alternatives in Russia.

IGC also take into account Australia's adverse weather before made the revision where dryness in western areas has curbed yield prospects. In Western Australia where the crop is about two weeks behind in its development.

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Despite wheat prices remaining elevated, the council lifted its estimate for world wheat consumption by 2m tones, deepening to 13m tones the production shortfall, as Russia's burgeoning livestock industry struggles to source feed supplies.

Although recent high prices have reduced projected feed use of wheat in parts of Asia and the European Union, this is more than outweighed by an increased forecast for Russia, the IGC said.

Indeed, Russia's overall wheat consumption would hit 49.7m tones, 6m tones higher than previously forecast, because of demand from livestock farmers who had limited supplies of other feed ingredients, including barley.

Nonetheless, Russia was set to remain a wheat exporter, of 3.5m tones, a considerable fall year on year but enough to outpace purchases abroad of 1.0m tones and avoid the country returning to the fold of net importers.

The council forecast the US picking up a chunk of Russia's lost trade, with American exports set to reach 33.0m tones, 4.5m tones more than previously estimated, and the highest for four years.

The estimates came as the US Department of Agriculture unveiled weekly US wheat sales of 1.08m tones, more than 100,000 tones more than analysts had expected.