QUOTE AND NEWS
The Hindu Business Line  11 hrs ago  Comment 
Reduced off-take coupled with easy availability of stocks pulled dara wheat and flour prices down by ₹15-25 a quintal on Friday. Radhey Shyam, a commodity expert, told Business Line
FX Street  Apr 3  Comment 
Currencies The euro (EUR) slid lower finding new support at 1.37535 against the US dollar (USD).... For more information, read our latest forex news and reports.
The Hindu Business Line  Apr 3  Comment 
Sunfeast has launched the Farmlite range of health biscuits, one containing oats, wheat and almonds, and the other containing oats, wheat and raisins. Priced ₹50 for 150gm, it is available across...
Agrimoney.com  Apr 1  Comment 
Showers have helped stabilise the condition of drought-hit US winter wheat, official data show. But academics warn that far more rainfall is needed
Commodity Online  Apr 1  Comment 
In accordance with the provisions of the Company's US$1 billion non-revolving term loan ("NRT Loan"), Silver Wheaton has extended the term of the NRT Loan by one year to May 28, 2017. As of December 31, 2013, Silver Wheaton had $1 billion...




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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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