Wheat extended losses after plunging by the most in five weeks and corn dropped for a third day on speculation that the global economy is faltering, hurting demand for the grains used in food, livestock feeds and fuels. Wheat futures for December delivery dropped as much as 2 percent to $7.1075 a bushel on the Chicago Board of Trade before trading at $7.13 at 1:22 p.m. Singapore time. Yesterday, they lost 3.3 percent, the biggest drop since June 30. The most- active contract has decreased 10 percent this year. “Markets seem to be increasing their bets that the U.S. economic recovery indeed turns negative,” Luke Mathews, commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “As long as this wider risk-aversion persists, we think that grain markets are susceptible to further selling pressure.” A global rout in equities drove the Standard & Poor’s 500 Index to its worst slump yesterday since February 2009, while two-year Treasury yields plunged to a record low amid concern the economy is weakening. Oil sank 5.8 percent yesterday to help the Thomson Reuters/Jefferies CRB Index of commodities erase its 2011 gain and the dollar rose as much as 1.7 percent against a basket of six currencies, curbing the appeal of U.S. exports. Asian stocks fell as much as 4.1 percent today, the biggest loss since March 15. A U.S. report today is forecast to show that the unemployment rate stayed above 9 percent last month. Russian Grain Wheat futures also declined on signs that importers favor cheaper Russian grain, reducing demand for supplies from the U.S., the world’s top exporter. Egypt, the largest importer, bought 180,000 metric tons from Russia in a tender yesterday at $261.94 and $262.50 a ton. As of July 22, U.S. soft wheat for export traded at $275.30 a ton. On July 1, Russia lifted a ban on grain shipments imposed after a drought damaged last year’s crop. The U.S. reported overseas buyers last week canceled a net 405,598 tons of soybean purchases, the most since 1990. Exports of corn since Sept. 1 are 7.9 percent lower than a year earlier. Corn futures for December delivery dropped 1 percent to $6.9425 a bushel after falling 1.6 percent yesterday. The grain has climbed 10 percent this year as U.S. inventories slumped. Soybean futures for November delivery declined 0.9 percent to $13.3275 a bushel after losing 2 percent yesterday, the biggest drop since June 30. The oilseed has lost 5 percent this year. To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net. To contact the editors responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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