QUOTE AND NEWS
The Hindu Business Line  Nov 22  Comment 
Punjab Chief Minister Parkash Singh Badal, the Chief Minister of Punjab, recommended that the Indian Government fix minimum support prices of paddy and wheat keeping in mind rising input costs. Th...
Commodity Online  Nov 22  Comment 
The area under wheat sowing has slightly crossed last year and rsquo;s area. This year at 107.35 lakh hectare it is slightly higher than that of last year and rsquo;s 107.24 lakh hectares.
Agrimoney.com  Nov 20  Comment 
Grain officials in Egypt, the top wheat importer, buy from France at a sixth successive tender, with a farmer stand-off damaging Russia's chances
Agrimoney.com  Nov 20  Comment 
Soybeans gain, despite a drop in soymeal, as investors brace for US export data, which have been a on strong run. But poor demand hopes dent wheat
Commodity Online  Nov 18  Comment 
Switzerland-based Barry Callebaut Group has warned of a potential cocoa shortage by 2020. In 2012 Mars Inc had also expressed concerns over potential shortage of Cocoa.
The Hindu Business Line  Nov 17  Comment 
Ever wondered how the insect got inside the mango seed or the worms in a sealed packet of wheat flour?  Well, they were born there. The mother laid eggs on the mango flowers, or on the flour...
Agrimoney.com  Nov 14  Comment 
The late rains which hurt grain quality in the likes of Canada and France have struck in Western Australia, causing "some further damage"
Agrimoney.com  Nov 14  Comment 
The Russian farm operator says 10% of its winter wheat is "at high risk" - just as it has raised sowings of the grain, in favour of oilseeds
Commodity Online  Nov 14  Comment 
Coverage under rabi crops has gone up to 184.30 lakh hectare whereas last week it was at 80.13 lakh hectare. Area under Wheat slipped to 42.88 lakh hectare as against 52.50 lakh hectare last year.
The Hindu Business Line  Nov 14  Comment 




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This article describes a specific commodity. For grains prices in general, see the article on Grains Prices. For specific futures contracts, see the below section on wheat futures contracts.

Wheat is a commodity input that goes into many food products, from pasta to bread to baked sweets. Wheat futures on Chicago's commodities exchange more than doubled in September 2007 compared to the previous year, going from $3.95 a bushel to nearly $9. What's driving up wheat prices is a matter of simple supply and demand, as bad weather, including a spate of hurricanes, have created shortages of this important grain.

A more fundamental problem compounding the recent effects of bad weather is that farmers are increasingly switching to grow corn because of the skyrocketing demand for the ethanol-producing grain.

The chart at left shows continuous front-month futures contracts for Wheat traded on the Chicago Board of Trade (CBOT) in cents per bushel.

Map of Where Wheat is Produced

Companies Suffering from Rising Wheat Prices

Wheat is a truly global commodity input, as it is used for bread and pasta in Western countries and noodles in Asian countries. When wheat prices rise, companies are faced with the dilemma of taking a hit to gross margins or passing on cost increases to the consumer, which often decreases demand.

  • Sara Lee (NYSE:SLE) and Campbell Soup (NYSE:CPB) are both producers of baked goods, especially bread. Wheat flour is the main ingredient in most baked goods. Sara Lee had acquired instruments to hedge against rising wheat prices, but prices rose above expected increases.
  • Kellogg (NYSE:K), General Mills (NYSE:GIS), Kraft Foods (NYSE:KFT), PepsiCo's (NYSE:PEP) Quaker Foods, and Nestle (Public, VTX:NESN) are all major producers of breakfast cereals, most of which are made partly from wheat.
  • Kraft Foods and PepsiCo's Frito-Lay are the largest multinational snack companies. Many of the products manufactured by these companies, including corn chips, cookies, and crackers, are made primarily of grain products.

Japanese Companies

Wheat Futures Contracts

See Also

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