QUOTE AND NEWS
Agrimoney.com  Sep 28  Comment 
Western Australia crop hopes fade, as it braces for the latest in a series of frosts. In the east, rains may hurt quality, but not quantity
Agrimoney.com  Sep 27  Comment 
Andrey Sizov tells Agrimoney that Russia is seeing good conditions for winter wheat sowing, despite European Commissn concerns
Agrimoney.com  Sep 26  Comment 
Dry soils in south western Russian "raise concerns" about winter wheat prospects there, the European Commission says
Agrimoney.com  Sep 26  Comment 
Hedge funds, having spent months betting on gains in soft commodity prices and losses in grains, focus on spreads within ag sectors
The Economic Times  Sep 26  Comment 
About 6,00,000 tonnes of wheat has been imported from Australia, Ukrain, France and Russia, while another 4,00,000 to 5,00,000 tonnes is in the pipeline.
Benzinga  Sep 26  Comment 
December Chicago Wheat is trading at 404, down 3/4 of a cent/bushel. March Chicago Wheat is trading at 427 1/4, down 3/4 of a cent/bushel. December Kansas City Wheat is trading at 420, down 1 1/2 cents/bushel. Wheat futures are trading...
The Hindu Business Line  Sep 23  Comment 
The Central government on Friday cut the import duty on wheat, edible grade crude and refined palm oils and potato to keep prices in check ahead of the festival season. The import duty on wheat was c...
MarketWatch  Sep 23  Comment 
Russia has become the world’s leading exporter of wheat, proving that economic sanctions against Moscow can’t work, writes Amotz Asa-El.
Benzinga  Sep 22  Comment 
December Chicago Wheat is trading at 407 1/2, down 1/4 of cent/bushel. March Chicago Wheat is trading at 429, down 1/4 of a cent/bushel. December Kansas City Wheat is trading at 419 3/4, down 2 1/2 cents/bushel. Wheat futures are trading...
Agrimoney.com  Sep 22  Comment 
Wheat futures rise as Egypt follows up with a wheat tender its latest retreat on ergot. As does firmness in corn amid mixed US harvest results




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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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