Corncentrate on a factor which could help wheat/barley.

Grain | 3rd October 2022 | By Andrew Whitelaw

The Snapshot

  • The US wheat and corn market have a high correlation.
  • US corn conditions are the lowest since 2012 for this time of year.
  • They are the sixth lowest since 1986.
  • If corn comes under supply pressure, it can flow through to wheat/barley as demand switches to alternatives.

The Detail

Markets are related. There is a tendency for markets to move together, even some that you might think shouldn’t. One that does have a close relationship is wheat and corn.

I have written about this many times over the years, but we have a growing subscriber base, and not everyone has read all the historical articles.

The chart below shows corn and wheat futures on a monthly basis over the past 22 years. We can see that they have a close relationship with one another.

Largely this relationship is due to the ability of both commodities to be switched, i.e. for feed purposes.

Let’s look at the conditions in the US.

The USDA provide a weekly update throughout the growing season which lists the conditions of crops from very poor to excellent. The focus is generally on how much of the crop is considered to be good/excellent.

The chart above displays the corn conditions for the last week of September going back to 1986. Currently, the US crop is rated 52% good/excellent.

This places the US corn crop at its worst good/excellent condition rating since 2012. They are also the 6th lowest since 1986.

The US is one of the most important corn exporters, alongside Argentina and Brazil. If US corn exports deteriorate, then demand will switch to other origins. In addition, the demand may switch to alternative commodities – potentially wheat and barley.

Our wheat prices in Australia have a strong correlation with US futures. A rise in US corn, flowing through to wheat futures could be beneficial to Australian pricing levels.

A rising tide lifts all boats.


  • Corn
  • Wheat