Wheat reached a three-week high in Chicago on expectations that the grain’s price discount to corn will boost the amount used to feed livestock in the U.S. Soybeans and corn also rose.
U.S. cattle feeders were forecast by the government on March 8 to use 375 million bushels of wheat in the 12 months through May 31, more than double the amount used a year earlier. That estimate may increase in a March 28 report, said Frank J. Cholly, a senior commodities broker at RJO Futures. Corn sold for 52.5 cents a bushel more than wheat yesterday at terminals near Kansas City, U.S. Department of Agriculture data show.
“The price of wheat versus corn has been friendly for wheat and that will increase demand dramatically,” Cholly said by telephone from Chicago. “When we get the quarterly-grain stocks report next week we’ll get an idea of how much feed usage increased in wheat.”
Wheat futures for delivery in May rose 1.9 percent to settle at $7.36 a bushel at 2 p.m. on the Chicago Board of Trade. Prices earlier reached $7.37, the highest for a most-active contract since Feb. 21.
Soybean futures for May delivery climbed 0.9 percent to $14.1975 a bushel in Chicago, the first gain in seven sessions. Corn futures for delivery in May rebounded from earlier losses, gaining 0.5 percent to $7.325 a bushel on the CBOT, the fifth straight increase.
Corn prices may be supported in the next three-to-six months as wet weather erodes prospects for Brazil’s second harvest, Macquarie Group Ltd. said. Brazil’s secondary, or safrinha, corn harvest may be about 34.7 million metric tons, down from last year’s record 38.6 million tons, London-based Macquarie analyst Chris Gadd said today in an e-mailed report after a tour of South American crop areas.
Brazil harvests two corn crops annually, with farmers collecting the first crop starting in February and the second starting in June. Total corn output in the country may be 69.1 million tons, less than the U.S. Department of Agriculture’s forecast of 72.5 million tons.