Agrimoney.com  10 hrs ago  Comment 
Corn and soybean markets absorb a couple of large crop estimates, while sugar reaches a 4-1/2 month high
Agrimoney.com  Oct 2  Comment 
Candada's wheat harvest is seen above analyst's forecasts, with better weather in key growing regions
Southeast Farm Press  Oct 2  Comment 
Sponsored by Financial liquidity can help you weather low grain prices — while minimizing the burn. Given crop prices and production costs...
Agrimoney.com  Oct 1  Comment 
Soybeans fell despite strong US exports sales, while sugar extended its rally to a 4-month high
Southeast Farm Press  Oct 1  Comment 
Paul L. Hollis, Auburn University College of Agriculture Climate predictions for the upcoming fall and winter months indicate that Alabama wheat producers will have fewer problems this season with the Hessian fly, but...
Agrimoney.com  Oct 1  Comment 
NAB raises its forecast for the Australian wheat crop, but to a level well below the official forecast, as hopes for the harvest retreat
Agrimoney.com  Sep 30  Comment 
Smaller-than expected stocks data lifts wheat, while sugar gets support from Brazilian gasoline price move
Agrimoney.com  Sep 30  Comment 
Despite lifting its estimate of the wheat harvest nearly 4m tonnes, the EU sees no change in the pace of exports
Agrimoney.com  Sep 29  Comment 
Ags prove lethargic, although fare better than many other assets amid revived global growth fears. Cotton seeks a fourth consecutive positive session
Agrimoney.com  Sep 28  Comment 
Risk assets perform broadly negatively, after further downbeat Chinese economic data. But wheat and palm oil buck the trend. Palm hits a six-month top


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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