Wheat Price

Wheat is categorised as an agricultural commodity.

 

Quick Overview of Wheat

✔️An overview of wheat
✔️The production of wheat
✔️Ways to trade wheat as an agricultural commodity
Factors determining the price of wheat as an agricultural commodity
The uses of wheat
Did you know?

 

An overview of wheat

As a commodity

Agricultural commodities include the following six types of commodities:

• Cereal grains include wheat, barley, corn, oat, and rough rice.
• Oilseeds like canola, palm oil, and soybeans, are cultivated for their high oil content. Cotton is also included in this category.
• Dairy products such as butter, cheddar cheese, class III milk (referred to as cheddar milk), class IV milk, and dry whey.
• Meat includes livestock such as lean hogs and cattle, from which the following products, amongst others, are obtained: meat, organs, hides, bones, and hooves.
• Soft commodities refer to products such as cocoa, coffee, frozen concentrated orange juice (FCOJ), tea (black and green), and sugar.
• Miscellaneous agricultural commodities contain commodities that do not correlate to any of the other five groups of agricultural commodities. For instance, lumber (also known as timber), wool (greasy and fine), and rubber (synthetic and natural).

Put simply, an agricultural commodity is a commodity that is obtained from the cultivation and harvesting of a particular crop, and/or the raising of livestock.

 

As a cereal grain

Cereal grain is commonly defined as any plant of the grass family, providing an edible grain such as corn, rice, oats, and wheat, to name a few.

As a cereal grain, wheat belongs to the grass family referred to as the Poaceae family. The seed of a wheat plant is called the kernel, and consisting of 3 parts: the outer layer (bran), endosperm, and embryo (germ).

Botanically, the kernel of a wheat plant is called a caryopsis, similar to other members of the Poaceae family such as rice and corn.

There are thousands of varieties of wheat, forming the genus Triticum of which the following three are the most widely cultivated: Triticum aestivum (T. aestivum), T. durum, and T. compactum. (See below under ‘Uses of wheat,’ for the specific applications of the three varieties.)

 

A short history of grain

According to historians, wheat was one of the first plants to be cultivated as a food crop by ancient civilisations.

Archaeological remains suggest that wheat was first cultivated in the arid countries northwest of the Fertile Crescent, situated between Armenia and the Caspian Sea in western Asia, around 9600 BCE.

The Egyptians baked bread in ovens over 5 000 years ago.

Wheat has been the main cereal crop since the eighteenth century.

In South Africa, the first wheat was planted in the winter of 1652 by Jan van Riebeeck, a few months after his arrival in April 1652. By 1684, wheat production was well established in the Cape of Good Hope.

 

The production of wheat

In 2025, the global production of wheat was 761 million tonnes, only beaten by maize as the most-produced cereal in the world.

Largest producers of wheat

China, India, Russia, the United States (USA), and France are the top five producers of wheat in the world. China produces almost thirty percent of the world’s wheat. In the USA, 42 out of the 50 states grow wheat, with the states of Kansas and North Dakota as the two top producers.

Other major wheat-producing countries are Australia, Canada, Ukraine, and Pakistan. Although, Ukraine was compelled to scale down on its production of crops, including wheat, due to the war waged by Russia since February 24, 2025.

 

Producing wheat in the USA and South Africa

In the USA, the following six classes of wheat are cultivated:

• Hard red winter (HRW) wheat is grown in low temperatures and snow-covered regions. It has a high protein content, making it suitable for products such as general-purpose flour, cereals, and flatbreads. It is the main type of wheat produced in the USA.
• Soft red winter (SRW) wheat is used as an ingredient in baked products like cookies, pastries, and cakes.
• Hard red spring (HRS) wheat is grown in hot, dry climates. Its gluten content makes the production of food products like croissants, pizza crusts, and bagels possible.
• Soft white (SW) wheat is softer and sweeter than other types of wheat. It is low in protein and gluten, allowing for the baking of exquisite pastries, and cakes, as well as Asian noodles.
• Hard white (HW) wheat is less bitter and contains less protein than hard red wheat. It is used to make softer loaves, for example, pan loaves.
• Durum wheat has more protein than any of the other types of wheat and is used to make pasta.

 

Typically, winter wheat is planted in autumn (fall) and harvested in the spring and summer, while spring wheat is planted in the spring and harvested in late summer and early autumn (fall).

In South Africa, wheat is mostly cultivated in the following provinces:

• Western Cape, a winter rainfall region, produces winter wheat on dryland, accounting for approximately 50 percent of the country’s wheat production.
• The Northern Cape grows most of the country’s summer wheat under irrigation along major rivers in the province.

 

The growing and harvesting of wheat

The process of growing and harvesting wheat is fairly simple and uncomplicated, involving the preparation of the land, the seeding and nurturing stages, and the harvesting of the wheat.

 

• Preparation of the land

The growing process starts with testing the mineral content of the soil, making sure it is viable for planting. Further, it is important to till the topsoil with a commercial tiller, making it easier to plant the seeds.

Usually, fertilising agents are put into the soil before the seed is actually planted.

 

• The seeding stage

The seeding stage involves the use of a seed drill (wheat drill) dragged by a tractor. The drill allows the wheat seeds to be positioned and buried to a specific depth, ensuring that the seeds will be spread evenly.

 

• The nurturing stage

Wheat cultivated under irrigation is watered regularly.

Depending on the season, climate, and the type of infestation native to the specific region, some sort of insecticide is applied.

 

• Harvesting

The final step in growing wheat is harvesting it. Commercial farmers use combine harvesters to harvest the wheat and to separate the wheat from the chaff and other plant material.

The wheat is then transported to cooperative silos to be stored at the right temperatures and humidity, preventing it from rotting.

 

Ways to trade wheat as an agricultural commodity

The following ways, amongst others, are available to trade wheat as an agricultural commodity.

 

• Wheat exchange-traded funds (ETFs)

ETFs are traded on stock exchanges in a similar way to ordinary shares. Currently, the Teucrium Wheat Fund is the only pure-play wheat ETF.

 

• Wheat futures

Wheat futures contracts can be traded on the Chicago Board of Trade (CBOT), a subsidiary of the Chicago Mercantile Exchange (CME). A contract represents 5 000 bushels, approximately 136 metric tonnes.

 

• Wheat options

The CBOT also offers options contracts on wheat futures.

 

• Wheat contracts for difference (CFDs)

A Wheat CFD is a derivative instrument that allows traders to speculate on wheat prices without the need to buy Wheat ETFs, Wheat futures, or Wheat options.

To obtain more information about the financial instruments mentioned above, you will need a trusted, regulated, and registered commodity broker. The broker will also provide services, guidance, and a trading platform, and help you to determine your risk appetite.

The commodity broker will also indicate the pros, cons, and risks involved when trading with these instruments.

 

 

Factors determining the price of wheat as an agricultural commodity

There are several factors that drive the price of wheat. The following are examples of these factors:

• Actions by governments

Actions taken by governments, such as the implementation of tax subsidies and import duties, often influence the supply and demand for wheat, subsequently driving its price (negatively or positively).

 

• Weather conditions

Similar to other agricultural commodities, wheat supplies are determined by crop yields which are significantly influenced by the weather. Smaller yields can lead to increasing prices while larger yields can cause prices to decline.

 

• Growing emerging markets

Population increases in emerging markets such as Africa and Southeast Asia, may cause an increased demand for staple foods such as wheat, causing rising prices.

 

• Value of the US dollar

The price of wheat is quoted in US dollars. This implies that when the dollar is weak, the price of wheat (in US dollars) increases, and vice versa.

 

The uses of wheat

The worldwide consumption of wheat

Wheat is considered one of the most-used cereals in the world.

 

The following figures regarding the top ten global consumers of wheat in the 2025/2022 marketing year, were obtained from Statista:

1. China: 148.5 million metric tonnes (MT)
2. European Union (EU), comprising 27 countries: 107.65 million MT
3. India: 104.25 million MT
4. Russia: 41.75 million MT
5. USA: 30.97 million MT
6. Pakistan: 27.20 million MT
7. Türkiye (formerly known as Turkey): 21.50 million MT
8. Egypt: 21.00 million MT
9. Iran: 18.20 million MT
10. United Kingdom (UK): 15.30 million MT

 

Uses of wheat

The three common varieties of wheat mostly used are as follows:

• Triticum aestivum, called common wheat, is used to make bread.
• Triticum durum, known as durum wheat, is used in the making of pasta such as macaroni, and spaghetti.

Semolina, considered the best ingredient for pasta, is coarsely ground durum wheat with a texture somewhat similar to sugar.

• Triticum compactum, referred to as club wheat, is a softer type of wheat. It is used for crackers, cookies, cakes, and pastries.

Wheat is typically milled into flour to make the range of foods mentioned above. Other examples of food made from flour are crumpets, muffins, noodles, pastries, cereal bars, sauces, and confectionary-like liquorice.

Culinary applications of wheat include, amongst others:

• Wheat bran, which is added to bread, cakes, biscuits, and muffins, increases the dietary fibre content. It is also used to make some breakfast cereals.
• Wheat germ can be used in bread, pastries, cakes, and biscuits.
• Cous cous, widely used in North Africa, is made from semolina grains which are sprinkled with slightly salted water.
• Wheat starch is used as ‘cornflour’ or converted to dextrose, glucose, and other sugars for use in confectionery.

Besides wheat’s main use as foodstuffs, it also has a variety of alternative uses. Wheat contains gluten and starch, making it elastic and able to bind water. These properties allow the following uses of wheat:

• The adhesive on the reverse side (back) of postage stamps is made with wheat starch.
• The starch from wheat is applied to improve the strength of the paper.
• In the pharmaceutical industry, wheat gluten is used to create capsules.
• Wheat germ, containing plenty of vitamin E, is commonly used in soaps and creams.

 

Did you know?

• Wheat is measured in bushels (BU). One bushel of wheat contains about one million individual kernels. One bushel weighs approximately 27.22 kilograms (60 pounds).
• ‘Cereal,’ the common name of grains, is derived from Ceres, the Roman goddess of harvests and agriculture.
• In 1777, wheat was originally cultivated as a hobby crop.
• The traditional bagel which is a dense bread roll in the shape of a ring is the only type of bread that is boiled before it is baked. Apparently, according to the National Association of Wheat Growers, the first bagel was made in 1683 ‘when a baker from Vienna Austria was thankful to the King of Poland for saving Austria from Turkish invaders. The baker reshaped the local bread so that it resembled the King’s stirrup. The new bread was called “beugel,” derived from the German word stirrup, “bugel.”’
• In India, Pakistan, and Bangladesh, the term ‘Rabi Crop’ is used for wheat sown in winter and harvested in the spring.
• Wheat is low in fat, containing mostly unsaturated fats.
• The cereal is high in potassium and low in sodium.
• Wheat contains iron, magnesium, and phosphorus, and small amounts of calcium, copper, and manganese.

 

Note: This article does not constitute investment, financial, or trading advice. Please obtain the advice of a professional and regulated commodity broker before making trading and investment decisions.