Goldman Sachs forecast that, after surprise data in a US inventory report, wheat futures will likely extend their premium over corn - clashing with commentators such as Societe Generale, which baulked at the elevated level of the current price gap.
Goldman Sachs flagged "near-term upside risk" to its forecast for the gap between Chicago wheat futures, which it foresees standing at $6.50 a bushel at around the end of 2013, and corn futures, which it predicts will close the year at $4.25 a bushel.
The comment followed a US Department of Agriculture report on Monday which revealed that domestic corn stocks had not fallen as far as thought over 2012-13, beginning the new season (on September 1) at 824m bushels, 163m bushels above its previous estimate, and well above market expectations.
Wheat stocks, meanwhile, were, at 1.85bn bushels, short of investors' expectations as of the start of last month, by 59m bushels.
Strongest since at least the 1970s
The data "point to the strongest pace of wheat use since at least 1975" in the June-to-August period, Goldman analyst Damien Courvalin said, highlighting "strong summer wheat feeding".
According to analysis by broker CHS Hedging, the USDA data implied feed use of about 410m bushels of wheat over the quarter, exceeding the 407m bushels of corn consumed by livestock - a "record low".
Mr Courvalin also flagged the potential for the US to extend its fierce pace of wheat exports this year, and for "further exports to Brazil and China", noting too the "uncertainty on exportable surpluses" from the Black Sea, where rains have damaged quality, and Argentina, where drought and frost have dented harvest hopes.
The USDA report "will likely extend recent price action, pushing soybean and corn prices lower, and widening the Chicago wheat-over-corn price premium", he said.
However, other commentators questioned whether wheat could extend a premium over corn which already stood at $2.36 a bushel on Tuesday morning in Chicago on a December contract basis.
Societe Generale foresaid that "with wheat now trading at a much-higher-than-normal premium to corn, we expect gains to be limited going forward".
In fact, SocGen stuck with forecasts two weeks ago which predicted an average premium of $1.18 a bushel in the newly-started quarter, decreasing to $0.71 a bushel in the first three months of 2014.
"We expect corn prices to return to, and above, $5 a bushel as the new crop year unfolds as lower prices are likely to spur demand, particularly in the livestock and export markets," SocGen analyst Christopher Narayanan said.
But at Chicago-based broker RJ O'Brien, Richard Feltes flagged the "increasing odds" of US corn stocks ending 2013-14 at a historically-high 2.2bn bushels.
This "suggests that fall corn may be more appropriately priced at $4.25 a bushel which, at a $2.40 discount to December wheat, suggests top step for wheat at only $6.65 - about 13 cents a bushel below Monday's close".