Wheat rose for the second straight day on speculation that U.S. livestock producers will buy more after a slump in prices this year made the grain a cheaper alternative to corn feed.
Hard, red winter wheat sold at 38 cents a bushel less than corn yesterday at ports near Kansas City, the biggest discount since May 16, government data show. Wheat usually is more expensive than corn, fetching an average premium of $1.57 over the past decade. Because wheat has a higher protein content, livestock producers may buy more of it as long as prices are near parity, said Darrell Holaday at Advanced Market Concepts.
“People see wheat priced under corn and it had to be a buy,” Holaday, the firm’s president, said said by telephone from Wamego, Kansas. “Wheat’s gotten too low, and it’s ready for a bounce.”
Wheat futures for May delivery rose 0.1 percent to settle at $7.12 a bushel at 2 p.m. on the Chicago Board of Trade. The volume was 82 percent above the 100-day average. The price has tumbled 8.5 percent this year.
Corn futures for delivery in May gained 0.1 percent to $6.9525 a bushel in Chicago, while soybean futures for May delivery advanced 0.5 percent to $14.395 a bushel.
Feed mills in China, the world’s second-biggest corn consumer after the U.S., will probably order more U.S. grain on concern that domestic supply won’t meet demand before the fall harvest, said researcher Yigu Information Consulting Ltd., in Dalian, China.