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Wheat rallied on speculations that low grain prices will increase buying by flour millers and cereal makers.

Wheat futures for July delivery increased by 3.7 percent or 29.75 to $8.3725 a bushel on the Chicago Board of Trade.

A report from the U.S. Department of Agriculture showed that U.S. wheat exports increased as prices declined by 40 percent in the past weeks following a decline in demand and increased planting of the crop.

The grain rose by 78 percent last year posting the highest record of $13.495 a bushel on Feb. 27 on forecasts that world inventories will decline.

The U.S. Department of Agriculture said that wheat sales for the marketing year that ends May 31 gained 2 percent from last week to 178,800 metric tons.

Wheat is the fourth largest U.S. crop valued at $13.7 billion in 2007 behind corn, soybeans and hay.