QUOTE AND NEWS
The Economic Times  9 hrs ago  Comment 
Government is likely to raise MSP for wheat by Rs 50 per quintal, to encourage farmers to cover more area under staple crop in ongoing rabi season.
Agrimoney.com  12 hrs ago  Comment 
Corn and soybean futures end lower, well below day highs, hurt by a late drop by soymeal, which has become a market focus. But Russia fears lift wheat
Agrimoney.com  Oct 21  Comment 
The country's Gasc grain authority, at its third wheat tender this month, pays more than $250 a tonne, reflecting rises in a number of origins
Agrimoney.com  Oct 20  Comment 
Canadian farm officials lift their forecast for durum prices, citing a drop in world stocks to a 15-year low, but cut the outlook for wheat values
Agrimoney.com  Oct 17  Comment 
Corn futures nudge higher, helped by expectations of a big US export sales figure later. Still, it is largely a technical market, helping wheat too
Agrimoney.com  Oct 16  Comment 
EU farmers, facing revised subsidy rules, will cut seedings of barley, corn and rapeseed for the 2015 harvest. But wheat area will hold steady
Agrimoney.com  Oct 15  Comment 
The UK stayed a net wheat importer even as it was harvesting a huge crop - boding ill for avoiding big carryout stocks. But there are optimistic signs
Agrimoney.com  Oct 15  Comment 
The above-average pace of US winter wheat planting reflects progress in the southern Plains. In the Midwest, rains and corn harvest delays are telling
Agrimoney.com  Oct 13  Comment 
... but even so, the UK will need a "strong wheat export programme" too to avoid a ramp up in inventories, the HGCA says




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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

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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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