Wheat futures rebounded from an eight-month low on speculation that the grain’s discount to corn will spur increased use in animal-feed rations. Corn also gained, and soybeans were little changed.
Cash-wheat prices in Kansas City were 30.5 cents below corn yesterday, the lowest in eight months, while Toledo cash wheat traded at a 32.25-cent discount to corn, the lowest since May, data from the U.S. Department of Agriculture show. Production of chicken meat and pork will each rise 0.7 percent in 2013, the USDA said last week.
“Wheat is finding its way into more cattle feedyards and hog and poultry rations,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in a telephone interview. “Wheat is undervalued.”
Wheat futures for delivery in May rose 0.5 percent to $7.085 a bushel at 10:43 a.m. on the Chicago Board of Trade. The grain earlier fell to $6.9775, the lowest since June 25, as snow in the U.S. Great Plains eased drought conditions.
Corn prices gained on speculation that a drop to a seven- week low yesterday will attract demand from livestock and ethanol producers, Grow said.
Ethanol production in the U.S. rose 1 percent to 797,000 barrels a day in the week ended Feb. 15, the U.S. Energy Information Administration said last week. Output has climbed for three straight weeks.
Corn futures for delivery in May climbed 1.2 percent to $6.935 a bushel in Chicago, and soybeans for the same delivery month slid less than 0.1 percent to $14.3475 a bushel.
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