Global grain stockpiles will remain low through the coming marketing year on increased demand for crops to make fuels and foods, according to Dan Basse, president of researcher AgResource Co.

Inventories including corn and wheat will fall to 385 million metric tons even as production climbs to 1.843 billion tons in the 2012-13 marketing year, Basse said today in Geneva. Corn stocks will drop to 116 million tons next year, he said. That would be the lowest level since the 2006-07 year, U.S. Department of Agriculture data show.

“This is the third year in a row that world grain demand was not met by production,” Basse said. “The agricultural bull market is still alive, but we’re at a crossroads. World grain demand is forecast to rise, which leaves little tolerance for adverse weather.”

Corn and wheat may peak at about $7.20 a bushel on the Chicago Board of Trade, Basse said. Russian production and exports might pressure prices, he said. Corn for March delivery traded recently at $6.49 a bushel and wheat for delivery in the same month was at $6.42 a bushel.

Vegetable oils may lead gains by agricultural commodities in 2012 as Latin America and South America increase production of biodiesel, Basse said. Brazil will probably import 1 billion liters (264 million gallons) of ethanol from the U.S., he said.

“Latin America is expanding biodiesel production and increasing blending rates,” Basse said. “The energy and vegetable-oil markets are sleepers going forward.”

Basse spoke at the Global Grain 2011 conference. AgResource is based in Chicago.