QUOTE AND NEWS
Agrimoney.com  4 hrs ago  Comment 
Germany acknowledges some specification setbacks to a huge wheat harvest. But the UK says its crop has the quality to expect a a "competitive edge"
WA Business News  Sep 1  Comment 
Federal coalition tensions are mounting as a two-year deal on port access for bulk wheat exports expires in a month.
Commodity Online  Sep 1  Comment 
The seminar will focus on role of wheat system in tackling twin issues of sustained availability of basic food and combating menace of malnutrition among citizens. Wheat is the most essential crop in India and a large number of people depend upon...
Commodity Online  Sep 1  Comment 
The USDA has forecast Indian wheat shipments lower at 3 mt. India has exported about 1.7 million tonnes of wheat in the current fiscal. The wheat exports stood at 5.5 million tonnes in 2013-1. Wheat stocks in Central pool stood at 381 lakh tonnes...
The Hindu Business Line  Aug 31  Comment 
Chennai will host an international wheat and wheat products seminar during September 2-3. The meet, being held at a crucial time when the world is facing a glut in grains production,...
Agrimoney.com  Aug 29  Comment 
Wheat futures rise on a Nato caution over Russian troops in Ukraine. This time, the rally ignites chart support too. Corn and soybeans also gain
Agrimoney.com  Aug 29  Comment 
Wheat futures extend gains, as the latest rise in Ukraine tensions shows no sign of easing off. Soybeans gain too. But is that down to the calendar?




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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

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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