GRAINS-Wheat extends losses on forecasts for hefty stockpiles

* Wheat to 5-mo. low a day after USDA raises stocks view

* Soybeans lower on South American crop prospects

* Corn down in sympathy with wheat, poor export demand

* Coming Up: Federal Reserve policy meeting outcome 1730 GMT

(Recasts with U.S. trading; changes dateline from previous HAMBURG/SINGAPORE, changes byline) CHICAGO, Dec 12 (Reuters) - U.S. wheat futures fell for a fourth straight session on Wednesday, falling to a five-month low and adding to Tuesday's loss of more than 3 percent after the U.S. government forecast hefty stockpiles. Corn futures posted light losses a day after setting a three-week low, while soybeans fell on optimism about South American crop prospects. However, all three commodities pared early losses on expectations the U.S. Federal Reserve will announce a fresh round of bond buying to stimulate a fragile economic recovery.

The central bank will announce its decision around 11:30 a.m. CST (1730 GMT) at the end of a two-day meeting, and Fed Chairman Ben Bernanke will discuss it at a news conference at 1:15 p.m. CST (1915 GMT). "I think we are getting position-squaring before Bernanke speaks at 11:30. That's leading to a little bit of short-covering," said Sterling Smith, futures specialist with Citigroup in Chicago. Expectations are running high that the Fed will unveil plans to buy $45 billion more bonds every month, on top of the $40 billion it announced in September. At the Chicago Board of Trade as of 10:05 a.m. CST (1605 GMT), most-active March wheat was down 5-1/2 cents at $8.16 per bushel after falling to $8.09, just above chart support at its 200-day moving average at $8.07. Front-month December wheat dipped to $8.00, its lowest level since July 11. CBOT March corn was down 2-3/4 cents at $7.25-1/4 a bushel and January soybeans were down 6 cents at $14.66 a bushel. Grains continued to suffer one day after the USDA raised its estimate of U.S. 2012/2013 wheat ending stocks to 754 million bushels, 50 million bushels more than its November estimate and above market expectations. The USDA also increased its forecast for global wheat inventories to almost 177 million tonnes from 174 million in November and well above market projections following estimates of larger crops from Australia, Canada and China. "Chicago wheat on Tuesday ... got tipped out of the trading range we have been in since around late July," said Ole Hansen, head of commodity strategy at Saxo Bank. "I think the break below $8.42 to $8.43 a bushel in Chicago wheat yesterday brought about a lot of technical selling which continues today." Soybeans were under pressure from forecasts for favorable crop weather in Brazil, which is projected as the world's biggest soy producer. The USDA on Tuesday left its forecast for Brazil's soybean harvest unchanged at a record-large 81 million tonnes, and the Brazilian government has forecast the crop at 82.6 million tonnes. Forecasts called for beneficial rains in southern crop areas of Brazil over the next two weeks. "Brazil looks good, favorable as a whole, and there is an improving trend in Argentina, but not perfect. Occasional showers will set back planting, but we won't see the big soaking rains that they've been having," said Andy Karst, meteorologist for World Weather Inc. CBOT corn was under pressure from the declines in wheat, as well as slow export demand. South Korea's largest feed maker, NOFI, previously a loyal U.S. corn buyer, bought South American and South African corn in a major tender on Wednesday in a new strategy to diversify supply sources. As well, weekly data from the U.S. Energy Information Administration showed production of corn-based ethanol in the latest week fell to 824,000 barrels per day, down 1.3 percent from a week earlier. Underpinning the market, the USDA on Tuesday kept its U.S. corn stocks estimate at 647 million bushels, the smallest in 17 years, reflecting the impact of the worst drought in half a century this year.

Prices at 9:59 a.m. CST (1559 GMT)

LAST NET PCT YTD CHG CHG CHG CBOT corn 726.75 -1.25 -0.2% 12.4% CBOT soy 1469.00 -3.00 -0.2% 22.6% CBOT meal 447.40 -0.70 -0.2% 44.6% CBOT soyoil 50.11 -0.09 -0.2% -3.8% CBOT wheat 818.50 -3.00 -0.4% 25.4% CBOT rice 1548.50 -3.50 -0.2% 6.0% EU wheat 261.25 -0.50 -0.2% 29.0%US crude 86.33 0.54 0.6% -12.6% Dow Jones 13,264 16 0.1% 8.6% Gold 1711.21 1.36 0.1% 9.4% Euro/dollar 1.3039 0.0035 0.3% 0.7% Dollar Index 79.9630 -0.0980 -0.1% -0.3% Baltic Freight 826 -74 -8.2% -52.5%

(Additional reporting by Michael Hogan in Hamburg and Manolo Serapio Jr in Singapore; Editing by Helen Massy-Beresford; and Peter Galloway)