Dec. 4 (Bloomberg) -- Wheat plunged to the lowest price in 18 months on signs of waning demand for grain from the U.S., the world’s largest exporter.

U.S. exporters sold 207,576 metric tons in the week ended Nov. 27, the smallest total since the end of May, the Department of Agriculture said today in a report. Egypt, the world’s largest wheat importer, bought 240,000 tons from Russia and France on Dec. 2, shunning U.S. grain. Wheat futures have tumbled 64 percent from a record in February.

“The export pace is lousy, and that’s what’s hurting the market,” said Vince Ambrose, a trader at MF Global in Chicago. “There’s plenty of wheat around globally. Egypt’s been in the market. It’s cheaper for them to go to the Black Sea region, and they’ve been buying a lot of Russian wheat.”

Wheat futures for March delivery fell 33.75 cents, or 6.5 percent, to $4.86 a bushel on the Chicago Board of Trade, the biggest drop for a most-active contract since Oct. 10. Earlier, the price touched $4.85, the lowest since May 24, 2007. Wheat is down 45 percent this year, after reaching an all-time high of $13.495 on Feb. 27.

From June 1 to Nov. 27, overseas buyers committed to purchase 20.7 million tons of U.S. wheat since, a 27 percent drop from the same period a year earlier, USDA data show. Actual shipments are down 14 percent at 16.1 million tons.

A slumping global economy has reduced demand for raw materials as consumers cut back on spending and importers face a credit squeeze.

‘Much Longer’

The global recession will last “much longer than the norm,” Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., said in an interview on Bloomberg Television.

As demand falls, supplies are expected to increase. Global production may jump 12 percent to a record 682.4 million tons in the year ending May 31, the USDA has said. Farmers in Australia may collect 20 million tons, up 53 percent from the prior year’s drought-damaged crop, the agency said.

Growers in the U.S. may increase production 21 percent to 68 million tons, the government said. Canada is the second- biggest shipper of wheat, followed by Russia and Australia, USDA data show.

Wheat is the fourth-biggest U.S. crop, valued at $13.7 billion in 2007, behind corn, soybeans and hay, government data show.

To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.

Last Updated: December 4, 2008 16:01 EST