Wheat futures dropped, extending their biggest decline this month after the U.S. government boosted its estimate for global stockpiles. Soybeans fell and corn gained. World inventories of wheat before next year’s Northern Hemisphere harvests may total 202.37 million metric tons, the most since 2002, the U.S. Department of Agriculture said yesterday in a report. Global corn reserves were pegged at 123.19 million tons, 4.9 percent higher than a September forecast. Both projections exceeded analysts’ expectations. The USDA also cut its estimates for exports of both commodities. Corn and wheat prices this year reached the highest since touching records in 2008, as rising demand for meat boosted consumption of grain used in livestock feed, and as refining of grain-based fuels increased. While production of both crops will decline this year in the U.S., the world’s largest exporter, output is growing elsewhere. The revision of wheat stockpiles created a “bearish mood in the market,” said Takaki Shigemoto, a commodity analyst at research company JSC Corp. in Tokyo today. “Futures in Chicago may drop towards $6” a bushel, he said. Wheat futures for December delivery shed as much as 1.3 percent to $6.815 a bushel today before trading at $6.255. The price plunged 5.2 percent yesterday in Chicago, the biggest drop since Sept. 30, and is down 21 percent this year. Supply Response On Oct. 11, wheat surged 8.1 percent on speculation the U.S. might recover lost market share in exports. Wheat touched a three-month high in August and fell 23 percent in September. “Never underestimate the supply response of farmers to high prices,” said Sal Gilbertie, the president of Santa Fe, New Mexico-based Teucrium Trading LLC, which this year added exchange-traded products linked to wheat and soybeans. “Global wheat production rose because of the high prices.” Corn futures for December delivery were little changed at $6.415 a bushel after declining 0.7 percent yesterday, the first drop in three days. The most-active contract reached a two-week high yesterday of $6.55, after jumping the exchange limit of 40 cents Oct. 11. The price gained 13 percent in the past year. World corn production in the crop year that began Oct. 1 will be a record 860.09 million tons, up 3.8 percent from a year earlier, the USDA said. The agency boosted its forecast for China’s crop by 2.2 percent to a record 182 million tons, and said Ukraine will harvest 21 million tons, up 76 percent from last year. Soybeans Decline Soybeans declined 0.3 percent to $12.36 a bushel, after rising 0.3 percent yesterday, the third straight daily gain and capping the longest such rally since late August. The U.S. crop this year will decline 8.1 percent to 3.06 billion bushels from a year earlier, the government said. Last month, the agency estimated output at 3.085 billion. Yields will drop 4.6 percent to 41.5 bushels an acre, the second-lowest since 2003. Inventories before the 2012 harvest will fall to 5.1 percent of use from 6.6 percent. To contact the reporters on this story: Aya Takada in Tokyo at atakada2@bloomberg.net; Jeff Wilson in Chicago at jwilson29@bloomberg.net. To contact the editor responsible for this story: James Poole in Singapore at Jpoole4@bloomberg.net

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