March 18 (Bloomberg) -- Wheat rallied on speculation that importers, seeking to rebuild dwindling inventories, will snap up supplies after prices in Chicago fell 12 percent in the previous three sessions.

Jordan bought 100,000 metric tons today from Kazakhstan, Turkey plans to purchase 500,000 tons, and Morocco is shopping for 136,050 tons. Global supplies will fall to 110.4 million tons in the year ending May 31, a 30-year low, and U.S. stockpiles may drop to 6.6 million tons, a 47 percent decline from a year earlier, according to the U.S. government.

``Anytime we have a big drop in prices, traders want to see how far it'll drop before demand comes back in,'' said Mike Zuzolo, a chief analyst at Risk Management Commodities in Lafayette, Indiana. ``There's no cheap wheat available until the new crop comes around. Until we get that supply, there's support for old-crop wheat.''

Wheat futures for May delivery rose 32.5 cents, or 2.9 percent, to $11.64 a bushel on the Chicago Board of Trade. The slide in the previous three sessions sent prices to a one-week low.

Wheat prices still have more than doubled in the past 12 months, reaching a record $13.495 on Feb. 27. Drought hurt plants in Australia and Canada, and an April freeze, followed by excessive precipitation, curbed yields in the U.S., the largest exporter of the grain.

The U.S. Department of Agriculture projects Canada as the second-biggest exporter in the year ending May 31, followed by Russia, Argentina, Kazakhstan and Australia.

Demand Climbs

From June 1 to March 13, demand for U.S. supplies increased 51 percent from a year earlier, USDA data show.

The Northern Hemisphere's winter-wheat crop will be harvested in May and June. Prices for wheat harvested in the year that starts June 1 may continue to rise on concern the crop still may be damaged by adverse weather, analysts have said.

Wheat also climbed as commodities rebounded. Yesterday, the Reuters/Jefferies CRB Index plunged 4.6 percent, the most in at least five decades, on concern that a U.S. recession will erode demand for raw materials.

Crude oil jumped as much as 3.9 percent today, rallying after the Federal Reserve cut its benchmark interest rate to bolster the economy. Oil has soared 91 percent in the past year. Gold traded above $1,000 an ounce for a fourth straight session before erasing gains as the dollar recovered.

``Crude oil and gold are portraying the idea that these markets are ready for a bounce, and wheat picked up on that,'' Zuzolo said.

A farmer's strike in Argentina may limit production of wheat, corn and soybeans. The strike, started earlier this month because the government raised export taxes, may continue ``indefinitely'' until the taxes are lowered, said Eduardo Buzzi, president of the Argentine Agriculture Federation.

Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, 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: March 18, 2008 15:52 EDT