US farmers plan to plant their biggest corn acreage in eight years.  USDA report has corn plantings of 96.990 mln acres and soybeans at 83.510 mln acres. Analysts had been expecting corn to show 94.328 mln acres of corn and 84.865 mln acres for soybeans.

In grain markets, we generally experience all the grains and oilseeds (corn, wheat, soybeans) moving in the same direction together.  Very rarely do we see a divergence in values, but recently we've seen global wheat mkts rallying, whereas corn has largely ignored the move.  The long-term price differential between corn and wheat is around $1.50/bu (currently trading at $2.20/bu).  Following this report, wheat could continue to strengthen on the world mkt, and corn weaken to multi-year low values.

The ethanol debate is very interesting.  We currently have low oil prices due to Russia/OPEC refusing to restrict production.  The global economic slowdown from coronavirus (airlines/manufacturing/etc) further affects the oil usage and puts into question the need for large supplies of US ethanol (refined from US corn).

Now look at corn availability - large intended plantings for this Spring in the USA, plus the confirmation of a large Brazilian crop.  We may see corn area reduce, switching some acres to soybeans.  Fundamentally, we are looking at higher areas of corn and soybeans given "normal weather".  However, any problems throughout May 2020 getting these crops in the ground may save corn from being heavily discounted.

In other news, India's last-minute curfew of people movements means that the Indian wheat crop is ready to harvest without enough necessary workers available.  How much of the 100 mln MT Indian wheat crop will make it out of the field?

In conclusion, UK wheat prices are well-priced for new crop although the recent strength in sterling has negatively affected ex-farm values.  In the short-term, wheat feels supported as consumers continue to panic buy around the world.  However, the already wide wheat:corn ration could return to normal, depressing global wheat values.  The UK is also hugely exposed to cheaper wheat imports if currency moves back to 1.17, and ultimately there will be huge demand destruction if wheat remains high-priced for a sustained period.  Growers should be looking to secure some value in new crop wheat, and not be complacent about current prices.