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Wheat futures gained for the second straight day on speculation that demand will rise as more of the grain will be added to livestock feed as corn costs climb.
The price of corn, the main ingredient in U.S. animal feed, rose as much as 1.5 percent today in Chicago after the government announced overseas sales of 480,000 metric tons to unknown buyers. With less corn available in the U.S. and prices rising, some cattle producers in the southern Great Plains will add wheat to livestock rations, said David Lambert, head of the agriculture economics department at Kansas State University in Manhattan.
“Wheat would follow a corn rally,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said in a telephone interview. Prices are rising after the corn export-sales report, he said.
Wheat futures for July delivery gained 1.7 percent to $6.435 a bushel at 10:08 a.m. on the Chicago Board of Trade. Before today, prices dropped 3.1 percent this year.
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
- Tony C. Dreibus in London at Bloomberg.