Wheat (ZW)

The staff of life. Wheat feeds billions through bread, pasta, and countless food products worldwide.

2-Minute Beginner Summary

Wheat is humanity's most important food grain. It makes bread, pasta, cereals, and beer. Global trade is massive—many countries depend on imports. Russia and Ukraine are major exporters, so geopolitics often affects wheat prices. Weather in the U.S., Europe, and the Black Sea region all matter.

What Is Wheat?

Wheat is a grass cultivated for its grain, a staple food for 40% of the world population. Different varieties include hard red, soft red, durum, and spring wheat.

Why ZW Matters

Wheat is a political commodity. Food security concerns make governments sensitive to prices. Price spikes can cause social unrest.

What Moves the Price?

Top 6 drivers affecting Wheat prices:

Black Sea Supplies

Russia and Ukraine are major exporters. Conflict disrupts trade.

Weather

Drought, frost, and disease affect production in multiple regions.

USDA Reports

Monthly supply/demand estimates move markets significantly.

Export Demand

Egypt, Indonesia, Turkey are major importers. Tender activity matters.

Corn/Wheat Spread

When wheat is cheap relative to corn, feed demand switches to wheat.

Currency Movements

Ruble, euro, and AUD affect exporter competitiveness.

Market Structure

Spot vs Futures

CBOT is the benchmark for U.S. wheat. KC (Kansas City) trades hard red winter. Minneapolis trades spring wheat.

Contango & Backwardation

Typically in contango due to storage costs. Geopolitical shocks can cause spikes and backwardation.

Key Exchanges: CBOT (CME Group), KC (Kansas City), Minneapolis Grain Exchange

Contract Size: 5,000 bushels per contract

Seasonality

Multiple wheat crops globally create complex seasonality.

Peak Months: May, June, July

Low Months: August, September, October

Northern hemisphere harvest (June-August) typically pressures prices. Southern hemisphere (Dec-Jan) provides counter-seasonal supply.

Macro Sensitivity

Wheat is dollar-sensitive. Food security concerns can override normal price relationships during crises.

USD Sensitivity: negative
Inflation Sensitivity: positive
Growth Sensitivity: neutral
Rates Sensitivity: neutral

Stock & ETF Exposure Map

Related Stocks

Related ETFs

Key Calendar & Reports

USDA WASDE Report (Monthly)

Source: USDA. World supply and demand estimates

USDA Crop Progress (Weekly)

Source: USDA. Planting and condition reports

Russian Export Data (Weekly/Monthly)

Source: SovEcon, IKAR. Black Sea export volumes

Egypt GASC Tenders (Bi-weekly)

Source: GASC. World's largest wheat importer buying

How to Trade Wheat

ETFs like WEAT offer exposure. Agribusiness stocks (ADM, BG) provide indirect access. CBOT futures are the benchmark.

Frequently Asked Questions

Why did wheat spike in 2022?

Russia's invasion of Ukraine disrupted Black Sea exports. Both countries are major wheat exporters.

What's the difference between CBOT and KC wheat?

CBOT trades soft red winter wheat. KC trades hard red winter, used for bread flour. Different quality, different prices.

Why does Egypt matter?

Egypt is the world's largest wheat importer. Their tenders set price expectations for global trade.

What is durum wheat?

A hard wheat variety used for pasta. Grown mainly in North Dakota, Canada, and the Mediterranean.

How does wheat differ from corn?

Wheat is primarily human food; corn is mostly animal feed and ethanol. Wheat is more geopolitically sensitive.

What is the wheat/corn spread?

The price ratio between wheat and corn. When wheat is cheap relative to corn, it gets used for animal feed.

Why are Black Sea exports important?

Russia and Ukraine export 30% of global wheat. Any disruption affects global prices and food security.

What is protein content?

Higher protein wheat (13%+) makes better bread. Protein premiums vary based on baking quality needs.

Glossary

Bushel: Standard unit: 60 pounds for wheat (vs 56 for corn).
Hard Red Winter: High-protein wheat for bread flour, grown in Kansas, Oklahoma.
Soft Red Winter: Lower-protein wheat for pastries and crackers, grown in the Midwest.
Spring Wheat: Planted in spring, higher protein, grown in North Dakota, Montana.
Durum: Hard wheat for pasta, grown in North Dakota and Mediterranean.
Black Sea: Major wheat export region: Russia, Ukraine, Kazakhstan.
GASC: Egypt's General Authority for Supply Commodities, the largest wheat buyer.
Protein Premium: Price increase for higher protein wheat.
FOB: Free On Board - export price at the port.
Vernalization: Cold period needed for winter wheat development.