Wheat prices hit new highs yesterday as a US report showed heavier than expected use of maize for ethanol, bringing stock estimates down for the end of the cereal year.

London May 2011 wheat futures closed at £212.75/t, up by £3.75/t on the previous day and taking ex-farm prices well above £200/t. However, the biggest increases came in 2012 contracts, with several delivery months rising by £5/t.

World maize stocks are now put at 122.5m tonnes, which is 4.5m tonnes lower than last month’s estimate. This represents 14.6% of world demand, or less than eight weeks’ consumption and the lowest since 1973-74.

“Markets become increasingly sensitive when world maize stock levels fall below the equivalent of two months usage,” said HGCA.

Wheat stock and use figures were little changed by the latest US Department of Agriculture estimates but wheat and other grains rose in price on the back of the maize figures. World wheat stocks represent 26.7% of total world demand, equivalent to almost 14 weeks’ use.