Feb. 26 (Bloomberg) -- 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, while soybeans declined for a third session.
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 0.8 percent to close at $7.11 a bushel at 2 p.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 the most this month 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 1.3 percent to $6.9475 a bushel in Chicago, the biggest gain since Jan. 30. Yesterday, the price touched $6.8075, the lowest since Jan. 7.
Soybeans dropped on speculation that record crops in South America, and rising palm-oil output in Indonesia and Malaysia, will curtail demand for U.S. supplies.
Soybean futures for May delivery slid 0.2 percent to $14.3175 a bushel, the third straight decline.
Soybean-oil futures fell the most in more than three months on speculation that record palm-oil production and rising inventories of the competing vegetable oil will slow demand, Anne Frick, the senior oilseed analyst for Jefferies Bache LLC in New York, said in a report today. Soybean-oil futures on the Dalian Commodity Exchange fell to the lowest in two years today in China, the biggest global buyer of soybeans.
--With assistance from Ranjeetha Pakiam in Kuala Lumpur. Editors: Thomas Galatola, Patrick McKiernan