Wheat futures climbed to a one-month high on speculation that U.S. livestock producers will use more of the grain as an alternative feed ingredient, after the price of corn surged. Corn futures rose to a five-week high today after the government said U.S. crop conditions deteriorated last week while hot weather this week threatens to erode yields. Corn and wheat futures for September delivery have traded near parity in the past month, compared with an average premium for wheat of $1.95 a bushel during the past year. “All the wheat market is doing is following on the coattails of the corn,” Dewey Strickler, the president of Ag Watch Market Advisers, said in a telephone interview from Franklin, Kentucky. “If the price relationship would continue to improve, you would see more wheat used in the feed rations.” Wheat futures for September delivery jumped 25 cents, or 3.6 percent, to $7.145 a bushel at 9:50 a.m. on the Chicago Board of Trade, after touching $7.2775, the highest for a most- active contract since June 16. Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show. To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net. To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

Source