QUOTE AND NEWS
The Australian  Feb 7  Comment 
The global trade map in wheat is being redrawn by people like Greg Harvey.
Agrimoney.com  Feb 6  Comment 
Gasc axes a second tender in four days as most merchants stay sidelined, despite an apparent u-turn on a controversial spec. Paris futures fall again
Wall Street Journal  Feb 6  Comment 
Record harvests, the strong dollar and cheap oil are combining to shake up the multibillion-dollar global wheat market.
Agrimoney.com  Feb 5  Comment 
Producers' groups Copa and Cogeca lift their forecast for the world's biggest wheat harvest. But barley, corn prospects are downgraded
Agrimoney.com  Feb 5  Comment 
Grain authority Gasc axes a second tender in four days as most merchants stay sidelined, despite an apparent u-turn on a controversial specification
Agrimoney.com  Feb 5  Comment 
Palm oil futures hit a fresh 20-month high, helped by pre-holiday short covering. But wheat extends its drop, despite the return of top buyer Egypt
Agrimoney.com  Feb 4  Comment 
US staff flag raised grain import needs for South Africa - which the UN warns faces a 25% wheat output drop. Import ideas rise elsewhere in Africa too
Financial Times  Feb 3  Comment 
Agriculture ministry now accepts grain with traces of ergot at international standards
Agrimoney.com  Feb 3  Comment 
Corn and soybean futures, helped in the last session by a focus on the coming of the spring sowing season, struggle this time. in fact, wheat leads
Agrimoney.com  Feb 3  Comment 
The world's top wheat importer has been effectively barred by grain merchants over a zero tolerance policy on contamination with ergot




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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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