Wheat Prices Smacked On Concerns Over Premium to Corn

In a few areas wheat and corn are interchangeable/substitutable. In Teesside* England there are some corporate morons trying to make* industrial ethanol from wheat.
Corn is down a bit more, $458-2 off 5-4 while wheat is down 2.3% at $643-6.
From Agrimoney:
Wheat prices fall amid doubts on premium over corn

Wheat futures tumbled to contract lows in Chicago, amid alarm bells at the relatively high price of the grain to corn, with an upgrade by Informa Economics to its US harvest number also fuelling selling.

Informa, in monthly estimates, raised its estimate for the US winter wheat crop by 71m bushels to 1.547bn bushels, a little ahead of the US Department of Agriculture estimate taken as the industry benchmark.

The analysis group was a little ahead of the USDA on both the crop of hard red winter wheat, pitched at 797m bushels, and of soft red winter wheat, seen at 540m bushels.

Corn, wheat spreads reverse

However, according to Linn Group analyst Roy Huckabay, the upgrade was not on its own sufficient to explain selling in wheat which drove Chicago's wheat contract down nearly 3%, to $6.41 ½ a bushel for September, a contract low, and to $6.54 a bushel for December, also  the lot's lowest ever.

 "The Informa numbers were not such a big deal," he told Agrimoney.com.

"I think what we have been seeing is a lot of buying wheat and selling corn, and people today just selling out of that."

Regulatory data showed hedge funds cutting their net short position in Chicago wheat futures and options by nearly 8,000 contracts in the last week of July, compared with a boost of nearly 25,000 contracts to their net short position in corn.

Too much premium?

Indeed, the extent of the premium of Chicago wheat futures of nearly $2.10 a bushel to Chicago corn as of the last session's close had attracted comment from analysts, given that the two grains are interchangeable in many uses....MORE

Also at Agrimoney:
Hedge funds, after soy setback, 'at risk in wheat'

*Older and/or more informed readers may remember Teesside as the spot that North Sea natural gas came ashore and the place Enron built their big co-gen plant.

**Back in 2007 our headline was "Making Ethanol from Wheat is Stupid" followed by:

October 2007
Ensus Wheat Ethanol Plant Construction On Plan, Despite Odds
May 2011 
Duh: "'Pricey wheat' forces shutdown at British ethanol pioneer"
August 2012
Euro-nuts: Making Ethanol From Wheat Still Stupid

Increasing possibility' of Ensus plant reopening....