Wheat rose for a third straight day after Japan bought 100,000 metric tons of U.S. grain, the first such purchase by Asia's largest wheat buyer since mid-September.

 

Japan's purchase of U.S. milling wheat came after new safety rules were imposed following the sale of tainted imported rice to domestic food makers. Wheat futures have dropped 23 percent in the past two months.

 

``When you get a good number like Japan's coming out, that starts rallying wheat,'' said Jon Marcus, president of Lakefront Futures and Options in Chicago. ``Japan's purchase helped boost prices, but the question is, is that digested already?''

 

Wheat futures for March delivery rose 5.25 cents, or 1 percent, to $5.5875 a bushel on the Chicago Board of Trade. Wheat still is down 59 percent from a record $13.495 on Feb. 27.

 

The price whipsawed today, rising as much as 6.4 percent, then dropping to $5.4175, or 2.1 percent, before settlement. Futures climbed immediately after the 9:30 a.m. open in Chicago as rising prices triggered automatic buy orders, Marcus said. The price then fell, following other commodities and equities, he said.

 

``What happened right off the bat, there were 3,000 stops above the highs and as soon as it rallied through, it just kept going,'' Marcus said. ``Then energies started to sell off and the stock market got killed and dragged grains with it.''

 

`Dicey Trading'

 

Crude oil for December delivery rose $2.08, or 3.7 percent, to $58.24 a barrel on the New York Mercantile Exchange. Prices have tumbled 60 percent from a record $147.27 on July 11.

 

After wheat futures settled, U.S. equities surged. The Dow Jones Industrial Average, erasing an earlier 3.8 percent loss, jumped 552.59 points, or 6.7 percent, to close at 8,835.25.

 

``At the end of the day, crude rallied $4 from the low and the Dow rallied 500 points, and the bulls thought the wheat market should be bought,'' Marcus said after the close of trading in Chicago. ``When you get this kind of dicey trading, you get a week's worth of trading in one day. It becomes hard to hold a position.''

 

Wheat also may have increased on speculation that U.S. farmers, the world's largest exporters of the grain, will plant fewer acres of winter varieties because wet weather delayed the corn and soybean harvests.

 

About 71 percent of the U.S. corn harvest was completed as of Nov. 9, compared with 92 percent at the same time last year, the Department of Agriculture said earlier this week. About 7 percent of the soybean crop remained to be harvested, compared with 5 percent a year earlier.

 

``The winter-wheat crop is going to have less acres than last year,'' Kim Anderson, an agriculture economist at Oklahoma State University at Stillwater, said in a telephone interview . ``Prices are on the bottom for wheat.''

 

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