Wheat/Corn Ratio--Wheat as Animal Feed

You will often hear analysts talk about wheat prices being too high or low relative to corn.  They use the wheat/corn price ratio as an indicator of how much wheat will displace corn (the largest animal feed) as feed.  They then attempt to translate that information into bushels of demand and calculate the impact on future wheat prices.  
Nutritionally, wheat and corn are not equivalent. Corn has about 90 percent of the nutritional value of wheat. That is why corn prices are normally lower than wheat.

It seems odd to talk about wheat as a feed grain, but in reality, a sizeable amount of wheat is fed annually. In recent years, because of the significant wheat surpluses, feed use has become important in managing the supply.  This year, while still well behind exports and food uses in importance, almost 10 percent of the wheat crop is expected to be consumed as feed.  
Wheat traders, analysts and flour millers all watch the wheat/corn ratio as a main barometer of future price direction.  Any inequity beyond the nutritional value of the two will ultimately impact the price of wheat and flour.