CHICAGO – The worst U.S. drought since the 1930s Dust Bowl is damaging wheat crops, at a time when hedge funds are the most bearish on prices in seven months.

About 62 percent of the country is mired in a dry spell that the government says will last at least until March in states growing the most winter wheat. With dormant crops already in the worst condition since records began in 1985 and global inventories headed for a third annual drop, Chicago futures may rise as much as 26 percent to $9.50 a bushel this year, the median of 32 analyst estimates compiled by Bloomberg shows.

That raises the prospect of prices reversing their 20 percent drop since a July peak, a retreat that spurred funds to start betting on more declines in December. The drought is increasing concern that supplies will tighten because there is also dry weather in Argentina and Australia.

Heat waves in the Black Sea last year curbed cargoes and a lack of rain is slowing traffic on the Mississippi, which handles about 60 percent of U.S. grain exports.

Wheat advanced 19 percent to $7.78 in 2012 on the Chicago Board of Trade, having risen as high as $9.4725 in July. It was the biggest gain in the Standard & Poor’s GSCI Spot gauge of 24 commodities, which rose 0.3 percent. The MSCI All-Country World Index of equities jumped 13 percent, and the dollar fell 0.5 percent against a basket of six trading partners. Treasuries returned 2.3 percent, a Bank of America Corp. index shows.

About 33 percent of winter-wheat fields were in good or excellent condition by Nov. 25, from 52 percent a year earlier, U.S. Department of Agriculture data show.