Mark Smith, grain director at Saxon Agriculture, said there were signs that corporate funds were starting to rebuild the extensive positions held on the Chicago futures market before they scrambled to liquidate contracts this summer.

"It seems the funds are starting to creep back into play again, which is likely to be quite a supportive factor in the marketplace. And when these guys are buying they regularly buy huge tonnages."

More than 35m tonnes of "paper" wheat - over three times the UK national harvest - was traded in a single day on the Chicago market last year, Mr Smith said. "Funds can cause chaos when they leave the market in a hurry, but they do seem to have got back the appetite for soft commodities."

Last month, futures markets reacted jumpily to suggestions that the US government could regulate investors' involvement in soft commodities futures, as the scale of their activities risked putting upwards pressure on food prices.

"If Chicago becomes heavily regulated, it's possible we could see much greater investment fund activity on the French MATIF market or even the London futures exchange."

Mr Smith said he remained optimistic about the long term outlook for grain prices, although he acknowledged the UK had a significant exportable surplus to shift this season. "World stocks of grain are into the safe zone again, which is why we are seeing depressed farm prices. But the UN Food and Agriculture Organisation is predicting we will need 1bn tonnes of cereals worldwide by 2050 - and that's without any demand from biofuels."

World harvests in 2008 and 2009 had seen few production problems in key exporting regions like Australia and Canada, Mr Smith said, suggesting it was only a matter of time before weather problems somewhere caused a shortfall. "It's very rare to get three consecutive big crops in the world."

However, cheap Black Sea wheat remained an aggressive competitor to UK wheat for key Mediterranean markets. "Russia, the Ukraine and Kazakhstan all have a strategy to increase production and exports. These countries see highly variable production trends due to often extreme weather. But Ukraine is the key variable and that's the market to follow."

The Black Sea region had significant potential to increase yields, Mr Smith added. British farming company Landkom International, which farms some 8000ha in the Ukraine, had already pushed output to more than 1t/ha above the Ukrainian average, he said.