Agricultural Futures

Wheat Futures

Wheat Futures

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Chicago Wheat Futures (CBOT) – KC Wheat Futures (KCBT) – Minn. Wheat Futures (MGEX)

Wheat Futures Market

Wheat futures are standardized, exchange-traded commodities futures contracts. The contract buyer agrees to take delivery of a specific quantity of wheat (i.e. 5,000 bushels) from the seller at a predetermined price on a future delivery date.

Wheat Futures History

Wheat futures began trading in 1877. The wheat futures contract evolved as farmers (sellers) and dealers (buyers) began to commit to future exchanges of wheat for cash. The two parties exchanged a written contract representing a “guarantee.” Such contracts became common and were even used as collateral for bank loans.

Wheat Futures Facts

  • As a commodity, wheat is grown on more land area than any other commercial food
  • World trade in wheat is greater than all other crops combined
  • Globally, wheat is the leading source of vegetable protein in human food, with a higher protein content than other major cereals, maize, corn or rice
  • There are six wheat futures classifications: 1) hard red winter, 2) hard red spring, 3) soft red winter, 4) durum (hard), 5) hard white and 6) soft white wheat

Chicago SRW wheat is the most liquid wheat futures contract in the world, trading the equivalent of more than 15 million tons each day in 2013-9 ½ times more than the largest European contract. Wheat futures prices are particularly susceptible to changes in the weather. Massive droughts or floods can negatively affect the supply of wheat, which will in turn increase the price of wheat futures. Prices in competitive commodity futures products such as corn and rice futures are also a factor.

Wheat Futures Trading

  • Wheat is traded on the Chicago Board of Trade (CBOT), NYSE Euronext (Euronext), Kansas City Board of Trade (KCBT) and the Minneapolis Grain Exchange (MGEX)
  • Both wheat futures traded on CBOT and the KCBT are used as benchmarks for wheat prices in general. However, generally speaking, the term “wheat futures” refers to wheat futures traded on the CBOT while wheat futures traded on the KCBT are specified to be “KCBT wheat,” “KC wheat” or “Kansas City wheat”
  • CBOT wheat futures prices are quoted in dollars and cents per bushel and are traded in lot sizes of 5000 bushels (136 metric tons)
  • Euronext milling wheat futures are traded in units of 50 tonnes and contract prices are quoted in dollars and cents per bushel
  • Euronext wheat (No. 405) futures prices are quoted in pounds and pence per metric ton and are traded in lot sizes of 100 tonnes

Wheat Futures Contract Specifications

Contract Symbol Contract Unit Price Quotation
ZW 5,000 bushels cents per bushel
Trading Exchange Trading Hours Tick Value
CME GLOBEX 8:30 – 13:20,
19:00 – 7:45
1/4 cent = $12.50

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