Turkey said yesterday it plans to buy 500,000 metric tons of wheat on March 18, including 250,000 tons from the U.S. Stockpiles in the U.S. by May 31 probably will fall 47 percent from a year earlier, the Department of Agriculture said yesterday. Wheat prices have more than tripled in the past two years, reaching a record last month.

``Demand is much better than what I thought it would be this late in the marketing year,'' said Jerod Leman, a broker at Wellington Commodities in Carmel, Indiana. ``With the world having such a short crop, people were waiting. They can't wait any longer and need a little more before the new crop comes in.''

Wheat futures for May delivery rose 59.5 cents, or 4.9 percent, to $12.825 a bushel on the Chicago Board of Trade. The contract earlier jumped as much as 90 cents, the exchange limit, to $13.13. Wheat reached a record $13.495 on Feb. 27, as global demand soared and adverse weather curbed worldwide production.

U.S. inventories probably will tumble to 242 million bushels from 456 million a year earlier, the USDA forecast.

Exports Surge

Advance sales of U.S. supplies from June 1 to Feb. 28 soared 54 percent from a year earlier, the USDA said last week.

Drought devastated Australia's crop for two years in a row and hurt plants in Canada and Russia. An April freeze followed by excessive rainfall reduced yields in the U.S., the largest exporter of the grain. Canada is expected by the USDA to be the second-biggest exporter followed by Russia, Argentina, Kazakhstan and Australia.

Global inventories by May 31 are expected to fall 12 percent from a year earlier to 110.4 million metric tons, the lowest since 1978, the USDA said yesterday.

Dry weather in the U.S. western Great Plains may hurt yields for plants emerging from winter dormancy. No rain has fallen in the past week in most of Kansas and parts of Oklahoma, National Weather Service data show.

About 41 percent of Kansas wheat was in good or excellent condition for the week ending March 9, compared with 42 percent the prior week, USDA data show. About 60 percent of the crop earned top ratings a year earlier, the government said.

In Oklahoma, about 41 percent of wheat was in good or excellent condition, compared with 44 percent the previous week, the USDA said. A year earlier, 59 percent of the crop was rated good or excellent, government data show.

Some rain in West Texas may have helped plants. About 14 percent of the crop was in good or excellent condition as of March 9, compared with 10 percent the prior week, the USDA said.

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 12, 2008 15:23 EDT

www.bloomberg.com/apps/news