It would be easy to justify Wednesday slump in wheat prices, were it not for one thing.
The grain's own fundamentals don't warrant humungous prices. Wheat's important stocks-to-use ratio, which measures the availability of a crop, and therefore its price potential, comes in at 22.4% for the forward crop year, once China and India are stripped out.
(These two countries rarely trade much wheat and so can be justifiably factored out of the equation.)
That is a reasonably snug figure. But it is above the 20.1% that investors were looking at last August, on US Department of Agriculture estimates.
So it is hardly irrational, on that basis, that Chicago wheat should be cheaper now than it was then. Especially given the improvements that rain has given to prospects for European and Russian crops, and the growing fears for macroeconomic hiccups, which would temper demand.
But that is before taking a look what has gone on in other grains, such as barley, corn and oats.
For these crops, grouped as coarse grains, supplies look far tighter now than investors were looking at last summer. Factoring out China (corn is not such a big deal for India), coarse grains' stocks-to-use has tightened nearly three points to 9.7%, on USDA data.
(Even including China, which is small importer of these crops, the ratio comes in at 11.7% - down 3.6 points year on year.)
That implies prices should be far higher than they were last summer. And for corn, which is in particularly short supply, that is indeed true, with Chicago futures roughly two-thirds up.
In theory, that should support wheat futures too, given that the two grains are interchangeable for many uses. Both, for instance, can be used as animal feed, or to make ethanol.
So why hasn't corn done a better job of supporting wheat?
One reason may be that corn's price itself is too low. After all, corn is significantly cheaper now than it was two weeks ago, when the USDA slashed its forecast for stocks at the close of 2011-12 below even those forecast for the end of this season.
And lower prices won't go far in slowing demand, and helping inventories recover.
But another explanation could be that wheat and corn are not quite so readily substituted for eachother after all.
Ethanol data on Wednesday showed US production rebounding by 21,000 barrels per day to 901,000 barrels a day, in line with the four-week average.
And if expectations for a US report due on Friday are to be believed, hog farmers aren't cutting back either, with herds as of June 1 expected to come in marginally above year-ago levels.
Anecdotal evidence suggests that both these sectors are still heavily favouring corn over wheat, although better insight may be gained with US stocks statistics due next week.
But to judge by the continuing weakness of wheat futures, investors already believe that corn consumers need a bigger incentive to change grains.
By Mike Verdin