Nov. 3 (Bloomberg) -- Wheat futures in Chicago fell on concern that a gain in the dollar may erode demand for U.S. exports.

The dollar rose to a four-week high against a basket of six major currencies and has climbed 1.8 percent since Oct. 21. U.S. grain exports may drop as overseas buyers lose purchasing power from the dollar’s gain. Speculative investors seeking to hedge against rising prices also may lose interest in wheat.

“The dollar is certainly stronger, oil’s starting to break down and the grains can’t hold up without help from these outside markets,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “Wheat doesn’t stand up by itself very well.”

Wheat futures for December delivery fell 1 cent, or 0.2 percent, to $5.1575 a bushel on the Chicago Board of Trade. The price is down 16 percent this year, partly because of decreased demand for U.S. grain and increased global production.

On the Kansas City Board of Trade, December futures were unchanged at $5.20 a bushel. The December contract on the Minneapolis Grain Exchange declined 2 cents, or 0.4 percent, to $5.29 a bushel.

Wheat is the fourth-biggest U.S. crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show. The U.S. is the world’s largest exporter of wheat.

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

Last Updated: November 3, 2009 15:05 EST