Domestic wheat stocks will be bigger than previously forecast as overseas demand for U.S. supplies wanes due to improved production outlooks in key export competitors such as Australia, Russia and Canada, the government said on Thursday. The report could ease concerns over global food inflation as global food prices hover at a 10-year high. The U.N. food agency highlighted wheat in its latest price index due to heavy rains in Australia and potential changes to export measures in Russia. read more "They came out with more wheat than anyone expected," said Mark Gold, managing partner at Top Third Ag Marketing. "The world stocks are up, so that was a little bearish." U.S. wheat ending stocks for the 2021/22 marketing year were pegged at 598 million bushels, up 15 million from the previous forecast, the U.S. Agriculture Department said in its monthly World Agricultural Supply and Demand Estimates report. Analysts had been expecting wheat ending stocks of 589 million bushels, based on the average of estimates given in a Reuters poll. The benchmark Chicago Board of Trade March soft red winter wheat futures contract , which had already been trading at a one-month low, settled down 2.2% at $7.76-3/4 a bushel. USDA cut its wheat export forecast for the United States by 20 million bushels to 840 million. If realized, that would be a drop of 15% from the prior year. Global wheat production was seen at 777.89 million tonnes, up from 775.28 million in November. The biggest increase came from Australia, where the crop was seen reaching 34 million tonnes, up 2.5 million from the November outlook. "The USDA ramped up three of the seven major producers, which should pretty much nail down supply for the rest of the season," Charlie Sernatinger, global head of grain futures at ED&F Man Capital, said in a note. The rising production forecasts bumped up the global wheat stocks outlook to a bigger-than-expected 278.18 million tonnes. USDA left its outlooks for U.S. soybean and corn ending stocks unchanged at 340 million bushels and 1.493 billion bushels, respectively. Additional reporting by Christopher Walljasper; Editing by Dan Grebler and Aurora Ellis Our Standards: The Thomson Reuters Trust Principles.