Sept. 14 (Bloomberg) -- Wheat futures rebounded from a five-week low on speculation that demand will increase from livestock producers seeking an alternative to higher-priced corn as a feed grain.
Wheat futures for December delivery were 21 cents a bushel cheaper than the comparable corn contract yesterday in Chicago, the biggest discount since at least 1959. Wheat usually trades at a premium to corn. About 240 million bushels of wheat will be in feed and residual use this year, 80 percent more than last year, the U.S. estimated on Sept. 12. Corn prices have gained 46 percent in the past year after adverse weather hurt the U.S. crop.
“We’ll see more switching to wheat for feed purposes” at current prices, Frank Cholly Sr., a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “We should see demand pick up.”
Wheat futures for December delivery rose 2.5 cents, or 0.4 percent, to settle at $7.045 a bushel at 1:15 p.m. on the Chicago Board of Trade, the first gain since Sept. 2. Yesterday, the price touched $6.96, the lowest for a most-active contract since Aug. 9. The commodity has dropped 4.3 percent in the past 12 months.
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
--Editors: Patrick McKiernan, Millie Munshi
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