QUOTE AND NEWS
Agrimoney.com  22 min ago  Comment 
SovEcon deepens concerns over Russia's grain prospects for next year, warning of a threat from the weak rouble, besides from dryness and cold
Agrimoney.com  22 min ago  Comment 
The farm operator says that 20% of its Russian winter wheat "has emerged in a poor state", making it vulnerable to winterkill. News on dairy is better
Agrimoney.com  Oct 28  Comment 
US winter wheat is, while not in dismal health, in far worse condition than investors had expected, thanks to a lack of rain in the south and west
Agrimoney.com  Oct 28  Comment 
Grain futures gain, led by another scorching performance by soymeal, which jumps 5%. Disappointing US crop condition too helps wheat. But sugar eases
Southeast Farm Press  Oct 27  Comment 
Georgia Farm Services was ordered to pay more than $310,000 in damages and attorneys’ fees for selling 15 bags of AGSouth’s AGS 2000 wheat seed without the required markings and without appropriate permission from AGSouth. read more
Agriculture Online  Oct 27  Comment 
A new wheat variety is resistant to a couple of major disease pressures and performs under fairly harsh conditions, moisture-wise, making it a good fit for farmers in some key wheat-growing regions in the U.S. Its development could be on the front...
Commodity Online  Oct 27  Comment 
The industry in Pakistan say India's subsidised wheat will drive them out of the market. They allege that the the Indian government has offered a $50 per tonne additional subsidy to exporters.
USAToday.com  Oct 26  Comment 
Critics of genetically modified crops call for greater oversight, tighter approval process.




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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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