QUOTE AND NEWS
Agrimoney.com  2 hrs ago  Comment 
Wheat prices have "had an exciting week with prices starting to climb in an attention-grabbing way", AgVantage says, as drought fears grow
Agrimoney.com  Jun 14  Comment 
Deutscher Raiffeisenverband flags the boost to crops from recent rains, although wheat has benefited more than the likes of barley and rapeseed
Agrimoney.com  Jun 14  Comment 
... according to a survey by FocusEconomics, which also flags an upgrade to hopes for corn futures. But forecasters lose optimism over cocoa
Agrimoney.com  Jun 14  Comment 
Abares cuts hopes for Australian output of barley and canola, flagging soaring sowings of chickpeas, even at the expense of best ag practice
Agrimoney.com  Jun 13  Comment 
Abares cuts hopes for Australian output of barley and canola, flagging soaring sowings of chickpeas, even at the expense of best ag practice
Agrimoney.com  Jun 12  Comment 
Egypt's Gasc pays more than Algeria for wheat, amid fresh worries over cargo rejections. Still, a debt market signal is not flashing red
Japan Today  Jun 12  Comment 
A skydiver died on Sunday after he landed in a wheat field in Okegawa City, Saitama Prefecture. Police said the skydiver, a 42-year-old male office worker from Yokohama,…
USDA NASS  Jun 9  Comment 
Winter Wheat Production Up Less Than 1 Percent from May. Orange Production Up Slightly...
Agrimoney.com  Jun 9  Comment 
The proportion of North Dakota in drought soars to 87%, from 0% three weeks ago. Will rains come for crops, and in time? Cotton, sugar prices rise too
Agrimoney.com  Jun 8  Comment 
The proportion of North Dakota in drought soars to 87%, from 0% three weeks ago. Will rains come for crops, and in time? Cotton, sugar prices rise too




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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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