QUOTE AND NEWS
Benzinga  11 hrs ago  Comment 
March Corn is trading lower at 381, down 3 cents. July Corn is trading at 396 3/4, down 3 1/4 cents. March Chicago Wheat is trading a bit higher at 521 1/4, while March Kansas City Wheat is trading at 552, down 2 1/2 cents. Trading is...
Benzinga  Jan 27  Comment 
Agrimoney.com  Jan 27  Comment 
Argentine corn and wheat exports may beat earlier forecasts, thanks in part to expectations of "significant" policy reforms, US officials say
Benzinga  Jan 26  Comment 
The recent U.S. dollar strength and the record global supply of wheat has continued to pressure wheat prices Monday. March Wheat is trading at 525 1/4, down 4 3/4 cents. March Kansas City Wheat is down 7 cents at 557. Some chatter about cold...
Benzinga  Jan 26  Comment 
March Chicago Wheat is trading at 530 3/4, up 3/4 of a cent from Friday's close. March Kansas City Wheat is trading at 563 3/4, down 1/4 of a cent. Weekly export sales on Friday were 564,400 tons, which was better than expected. Some chatter about...
Agrimoney.com  Jan 26  Comment 
Canada's wheat harvest will rise this year - but not by enough to exceed demand, officials say. Canola inventories will fall too
Agrimoney.com  Jan 26  Comment 
Hedge funds extend their selldown of ag commodities, as the dollar strengthens and supply fears ease. Still, positioning on sugar bucks the trend
Commodity Online  Jan 23  Comment 
HLC recommends that FCI hand over all procurement operations of wheat, paddy and rice to states that have gained sufficient experience in this regard and have created reasonable infrastructure for procurement.




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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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