QUOTE AND NEWS
The Hindu Business Line  May 13  Comment 
Punjab government today said it has made a record payment of Rs 14,053.61 crore to wheat growers for procurement of the crop for the central pool during the ongoing rabi marketing season. The “per...
Agrimoney.com  May 12  Comment 
... in an assessment which differs from that of US officials, which have forecast Tunisia's wheat imports at a 10-year high in 2017-18
Agrimoney.com  May 11  Comment 
... with better Midwest weather prospects undermining prices too. But wheat manages to extend a gentle recovery, and soybeans revive, helped by palm
Agrimoney.com  May 10  Comment 
US officials, in first estimates for 2017-18, see world grain inventories falling for the first time in five years. But soybean futures ease
USDA NASS  May 10  Comment 
Winter Wheat Production Down 25 Percent from 2016. Orange Production Up 1 Percent from April...
Agrimoney.com  May 10  Comment 
Officials raise forecasts for shipments outside the EU to levels well above those initially expected after last year's rain-reduced harvest
The Hindu Business Line  May 9  Comment 
Wheat output to be all-time high at 97.44 mt
The Economic Times  May 9  Comment 
India is likely to produce a record 97.44 million tonnes of wheat, higher than a previous forecast of 96.64 million tonnes, the statement said.
Agrimoney.com  May 8  Comment 
Hedge funds cut short bets in hard wheat at a record pace. But has that only created scope for fresh sales? In softs, selling reaches its longest ever




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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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