World wheat stocks will drop by 13% next year and US and corn stocks will also be lower than expected until well into 2013, the US government predicted on Thursday, prior to farm ministers from across the globe meeting to discuss high food prices.

It was the second time in two weeks that the US agriculture department (USDA) delivered low estimates of crop stocks to the markets. This time, the USDA said unrelenting demand would drag down US corn and soybean stocks to the lowest levels in years – 17 years for corn and eight for soybeans.

Agriculture ministers are due to meet next week in Rome amid renewed fears of a crisis in food supplies exacerbated by the worst US drought in more than 50 years, and drought in Australia, the world’s leading wheat exporter.

On the US markets, corn futures soared 5% on the USDA’s forecasts, hitting a three-week high. Wheat futures were up 2% near the close of the trading day in Chicago and soybeans were up 1.6%. While at high levels, corn is about 10% lower and soybeans 15% lower than the records set during the summer.

The USDA’s estimates of the US corn and soybean crops were slightly larger than traders had expected, although the smallest in recent years. Corn is the most widely grown crop in the United States, followed by soybeans. Both are raw ingredients in processed foods, fed to livestock and converted to motor fuel. Livestock feeders say they are being ruined by high corn prices and so the US government should relax a requirement to mix corn ethanol into gasoline.

With US corn production down for the third year in a row, usage will be tightened tremendously. Exports are forecast at 1.15bn bushels in 2012-13, the smallest in 37 years. Five years ago, the figure stood at 2.4bn bushels. Meanwhile, corn imports are forecasted to be 75m bushels, three times larger than average. The USDA also cut its estimate of the European Union corn crop by 2.6%.

Drought will reduce Australia’s wheat crop to 23m tonnes, down 12% from a month ago, the USDA said. Harsh weather, including summer droughts and early frosts, cut an additional 3% from Russia’s wheat crop, it said.

The USDA added that while global wheat stocks would be down 13% next year, world soybean inventories would be up, boosted by huge crops in Brazil and Argentina, which would offset the crash is US