Farmers will produce the world’s smallest wheat crop in three years in 2010 as big global supplies weigh down prices and steer more acres to other crops, the Canadian Wheat Board said Jan. 15.

In its first market outlook of 2010, the board, one of the world’s biggest grain marketers, also said the outlook for durum wheat is negative because of burdensome supplies.

“It’s not that world (wheat) demand has been extremely poor. It’s just that our production has been quite high,” said Bruce Burnett, the wheat board’s director of weather and market analysis.

The world will produce 644 million tonnes of all types of wheat, down 4.7 per cent from the 2009 crop, he said. It would be the smallest global wheat crop since farmers harvested 610 million tonnes in 2007, but still the third largest in the past 15 years.

Weak prices due to the global wheat glut will cause Canadian farmers to plant slightly less spring wheat, but significantly fewer acres of durum wheat, Burnett said. That shift, along with an expected drop to normal yields, will produce Canada’s smallest all-wheat crop in three years of 24 million tonnes as farmers move to oilseeds and pulse crops that look more profitable, Burnett said.

The 26.5-million-tonne wheat crop Canada harvested last autumn is of high quality but low protein levels.

The wheat board’s projection for the Canadian wheat crop may be slightly conservative, said Lawrence Yakielashek, general manager and vice-president of grain trader Toepfer Canada Ltd.

Falling fertilizer and chemical prices make wheat an appealing choice on paper, and many farmers rotating crops this year will have to consider it, he said. The CWB has also done a good job marketing the 2009 crop, which may encourage farmers to stick with wheat, he said.

The CWB’s wheat projections include a 2.2 per cent production drop to 135 million tonnes in the European Union, the world’s biggest producer, and five per cent reduction to 57 million tonnes in the United States.

Global supplies are so large that it will take bad growing weather to tighten stocks and support prices, Burnett said.

Dryness in western parts of the Canadian Prairie continue to be a concern, while the CWB is also closely watching the impact of parched soil in India, Burnett said.

The CWB pegs the 2010 world durum crop at 33.7 million tonnes, down 9.9 per cent from last year’s crop.

World barley production in 2010 looks to drop 6.2 per cent to 134.4 million tonnes, which also falls below the crop’s five-year average of 140.6 million tonnes, he said. Canada’s production should edge slightly higher to 10 million tonnes, Burnett said.