WA commentators have told Farm Weekly that wheat could plunge to as low as $250/t later in the year if production conditions remain positive and world stocks continue to climb.

However, if production suffers in northern hemisphere grain growing regions, wheat prices could shoot back up to about $400/t at harvest.

Barley and canola prices have remained steady earlier in the year, but wheat has dipped more than 25 per cent over the past month because of several factors.

Grain futures plummeted last week as speculators who drove prices to record levels earlier in the year started pulling out of the market.

News of increased supplies and higher forecast crop plantings are entering market calculations, forcing wheat futures to drop.

Last year, even the slightest price signal sent shivers through the market and lifted local prices to extreme levels as buyers scrambled to snap up any tonnes that hit the market.

Drought conditions hit the Australian crop hard and with reduced harvests in other grain growing regions, such as the United States, world wheat stocks were reduced to near-record lows.

Amid tight supplies, similar pricing volatility continued this year. ProFarmer figures showed wheat futures dropped to $314/t last Friday after peaking at $418/t in late February.

Plum Grove senior commodity trader Tony Smith said wheat prices could drop to as low as $250/t this year depending on what happened with the US corn crop over the next month.

Mr Smith said, ultimately, what happened with wheat prices would be determined by the US’s crop which was being hampered by severe weather conditions.

He said world wheat production was expected to rebound by as much as 40 million tonnes this year.

He said most farmers around the world were planting more wheat and many regions were expecting better than average yields - a sharp contrast to the drought conditions which have rocked world wheat supplies during the past 18 months, kicking prices to highs of more than $400/t.

Australia and Europe is expected to produce most of that 40mt, with the local growers contributing as much as 25pc to the rebound.