Chicago Board of Trade (CBOT) wheat futures have surged to their biggest premium over corn since 2022, stoking demand for cheaper alternatives that could help reduce large global corn supplies.
The benchmark CBOT wheat contract Wv1 soared to a premium of $2.39-1/2 per bushel over corn Cv1 on Tuesday, the largest difference since October 10, 2022. This significant price gap has made wheat too expensive to be a top choice for animal feed.
Concerns about global wheat supplies, particularly due to deteriorating crop prospects in Russia, the world’s biggest exporter, have driven the sharp rise in wheat prices. CBOT wheat has increased by 37% from its lows in March, far outpacing the 15% rise in corn prices from its 2024 low in February.
Analysts say the current wheat-corn price differential means wheat is now at “food-grade status,” making it too costly to be widely used as animal feed. In contrast, the ample supply of corn makes it a more attractive and cheaper alternative.
The U.S. government has projected a decline of about 5% in the global use of wheat as animal feed in the upcoming season due to the availability of cheaper options.
As a result, analysts expect U.S. corn exports to increase as the wheat-corn price spread incentivizes the use of corn as the primary feed grain. A recent deal reported by the USDA, where 110,000 metric tons of U.S. corn were sold to Spain, is seen as being driven by this wheat-corn price dynamic.
“This could be a global phenomenon where the wheat-corn spread globally really turns the corn into the primary feed grain,” said Mike Zuzolo, president of Global Commodity Analytics. “It could be the strongest feeding side of the equation for corn in probably 5-7 years.”