Wheat Rises on Bets U.S. Exports to Climb Following Price Slide

By Jeff Wilson

Oct. 17 (Bloomberg) -- Wheat rose for the first time in four sessions on speculation that demand will increase for supplies from the U.S., the biggest seller of the grain, after prices touched a 16-month low yesterday.

The export price of soft red-winter wheat in New Orleans has dropped 58 percent from the record in March, increasing the appeal of U.S. supplies to purchasers including Egypt, the biggest global buyer, said Jerry Gidel, a market analyst at North American Risk Management Services Inc. in Chicago. A gauge of transportation expenses has dropped to a six-year low.

``U.S. wheat is very competitively priced on the world export market,'' Gidel said. ``The drop in shipping costs should help to boost sales.''

Wheat futures for December delivery rose 11 cents, or 2 percent, to $5.6625 a bushel on the Chicago Board of Trade, advancing 0.5 percent for the week, the first such gain in eight weeks. Yesterday, the price touched $5.43, the lowest for a most-active contract since June 11, 2007. Wheat is down 58 percent from a record $13.495 in late February.

U.S. export sales of wheat totaled 435,573 metric tons for the week ended Oct. 9, down 15 percent from the previous week, the Department of Agriculture said today.

Wheat is the fourth-biggest U.S. crop, valued at $13.7 billion in 2007, government data show. Corn is the largest at $52.1 billion last year, followed by soybeans and hay.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net.