WASHINGTON (Reuters) - Boosted by high prices and good weather, the world's farmers will reap record wheat and rice crops this year, the U.S. government said on Friday, which should somewhat allay fears of scanty food supplies.

The Agriculture Department also forecast a record feed grain crop globally, used to feed livestock. Wheat and rice are the world's major food grains, consumed directly or as baked goods like cakes and cookies.

The world wheat crop was forecast to rise 8 percent to a record 656 million tonnes while global rice production is projected for a record 432 million tonnes.

"This ought to take the edge off commodity prices" and make it easier for poor people to buy enough food, said private consultant John Schnittker.

Grain prices have soared to record highs in the past couple of years, driven by disappointing harvests, rising appetite for better diets and the boom in biofuels. Food prices are up -- dramatically so in some countries.

"We're keeping our fingers crossed that we get good harvests this year ... and that it brings prices down some from their high peaks," said analyst David Orden of the International Food Policy Research Institute, a think tank.

Even with bountiful crops, Orden said, larger international food-aid efforts will be vital because prices would be higher than usual for the next couple of years at least.

Record crops will allow people to consume more wheat and rice, USDA said, with enough left over to expand the global stockpile in this crop year, which is an aggregation of marketing years. The U.S. wheat harvest, for example, begins later this month while other nations will not harvest for months to come.

The world wheat crop was forecast for a record 656 million tonnes, up 8 percent from 2007/08, thanks to strong prices and favorable weather, said USDA. Consumption would rise by 3.5 percent and the year-end surplus would be 124 million tonnes, up 13 percent from the previous year.

"The only significant weather problems for winter wheat remain in drought-stricken Middle East and North Africa countries," said USDA.

Global rice production is projected for a record 432 million tonnes, up 5 million tonnes from 2007/08. With consumption of 428 million tonnes, the stockpile at the end of 2008/09 would be 82.6 million tonnes, largest in six years.

Cyclone Nargis struck Myanmar's Irrawaddy rice-growing region on May 2 and probably damaged rice from the recent dry-season harvest and disrupted planting of the rainy season rice crop. USDA estimated Myanmar's rice crop this year will be slashed by 7 percent to 10 million tonnes.

In looking at U.S. crops, USDA projected the largest wheat crop in 10 years at 2.392 billion bushels, the corn crop at 12.125 billion bushels and the soybean crop at 3.105 billion bushels. Due to a plunge in plantings, the cotton crop would total 14.5 million bales, down 25 percent from 2007.

One-third of the corn crop, 4 billion bushels, would be converted to fuel ethanol during the marketing year opening on September 1, enough to distill 11.2 billion gallons. Ethanol output during 2008 is forecast for 9 billion gallons.

"The slowing pace of plant constructions and expansion, and lower capacity utilization are expected to modestly dampen growth in ethanol corn use," USDA said.

But the Grocery Manufacturers Association, echoing concern in the food industry and from aid groups, blasted the growing use of corn to make fuel.

"Due to government mandates and subsidies, diversion of corn from food to fuel will jump by more than one-third and our domestic stocks of corn will fall to the lowest level in more than a decade," Scott Faber, a spokesman for the Grocery Manufacturers Association, said in a statement.

"These trends are sparking record inflation for corn prices, driving up the cost of milk, meat, eggs and virtually all food staples."

Due to a rainy spring in the Midwest, farmers planted only half as much corn as usual by May 4 -- 27 percent versus the five-year average of 59 percent. USDA said it lowered its projected yield by 1 bushel an acre, to 153.9, because of the delays. Corn yields are lower in late-planted fields.

Based on field surveys, USDA forecast the U.S. winter wheat crop at 1.778 billion bushels, up 17 percent from last year.

(Editing by Russell Blinch and Marguerita Choy)

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