QUOTE AND NEWS
Benzinga  9 hrs ago  Comment 
September Chicago Wheat is trading at 410 3/4, down 7 1/4 cents/bushel and a new contract low. December Chicago Wheat is trading at 434 1/2, down 8 cents/bushel. September Kansas City Wheat is trading at 405 1/2, down 5 cents/bushel. ...
Agrimoney.com  Jul 20  Comment 
"The freight cost from Ukraine to Indonesia is cheaper than from some Australian ports," US officials say, underlining growing wheat trade rivalry
Agrimoney.com  Jul 18  Comment 
Corn gains on a sharp cut to hedge fund long positions, while cotton edges down after Chinese auctions
Agrimoney.com  Jul 18  Comment 
Hedge funds slash long bets on ags again. Is selling in grains now sated? Softs are still in demand, although cotton takes the lead from sugar
Agrimoney.com  Jul 18  Comment 
... after all, details of offers to Egypt's latest tender show most merchants dropping prices, amid a shift east in European trading focus
Agrimoney.com  Jul 18  Comment 
The US weather outlook turns a touch more benign, putting pressure on soybean futures. But in corn and wheat, funds have less obvious scope for sales
Agrimoney.com  Jul 15  Comment 
Cotton futures break new two-year highs, while weather continues to set the pace for soybean and corn
The Hindu Business Line  Jul 15  Comment 
Concerned over the Union government’s recent move to extend the 25 per cent import duty on wheat indefinitely, roller flour millers from South India have urged the Food Ministry to recommend withdraw...
The Hindu Business Line  Jul 14  Comment 
 The eighth international wheat seminar on the theme of “New Ideas and Innovation for Growth” will be inaugurated on Sunday in Goa.Around 300 delegates from the wheat and wheat based industries are ex...




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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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