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Wheat


General Characteristics

 - Wheat is one of the world's three most important cereal crops along with maize and rice. It is reported to be grown domestically from atleast as early as 9000 BC and is now grown in almost all parts of the world. 
 - Wheat is a globally important source of dietary carbohydrate (starch) and protein (gluten). Its grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles etc and for fermentation to make beer, alcohol, vodka, or biofuel. It is also used for feeding animals to a limited extent. 
 - Different varieties of wheat are grown across the world. The six types of wheat used in modern food production are: Hard red winter, soft red winter, hard red spring, white spring, white winter and durum.


Wheat fields




Global market

 - The annual global wheat production has been in the range of 650-715 tonnes in the recent years. However, in 2014-15 it is estimated to have risen  to 722 million tonnes. The combined production of all cereals in 2014-15 is estimated to be 2471 million tonnes.  
 - EU, China, India, USA and Russia are the five major producers of wheat accounting for close to 70% of the total global production, with 2013-14 production in these regions being 143.51, 121.93, 93.51, 58.11 and 52 million tonnes respectively.  
 - Wheat is the most important cereal traded in the world market. The global trade in wheat during 2012-13 was at around 140 million tonnes in 2013-14 from an average of around 160 million tonnes. 
 - While US (30 - 35 million tonnes), EU-27 (20-30 million tonnes), Canada (18-20 million tonnes), Australia (15-18 million tonnes) and Argentina (2 - 5 million tonnes) are major exporters, there are a large number of countries importing wheat with maximum demand emanating from developing nations. The major importing regions are Middle-east Asia, South-east Asia and North-west Africa. Egypt, Brazil, Indonesia, Algeria are the most important importing nations.  
 - Wheat crops around the world have their own unique production cycles of planting and harvest timeframes.  


The world's top producers: Wheat



World wheat harvested area and yield



World wheat supply and demand



Important world wheat markets 

 - Derivatives exchanges - Chicago Mercantile Exchange, which acquired Chicago Board of Trade, Kansas City Board of Trade, Zhenghzhou Commodity Exchange, South African Futures Exchange, MCX, NCDEX.
 - US FOB and EU (France) FOB prices determine the physical prices.


All wheat production 2014



Black Sea exports



Estimated pct. of wheat production exported 2014-15



Market influencing factors

 - Wheat is an annual, seasonal crop and prices usually tend to rise during the cultivation period 
 - Weather has a profound influence on production 
 - Despite international trade being limited, the several variations in production or consumption at various major or minor producing or consuming country, which influence global prices, are reflected in the domestic long-term price trend. However, in the short-term normally there is no significant relation with international prices
 - Several international agencies like US Dept. of Agriculture, International Grains Council  Food and Agricultural Organisation release regular, periodic reports on global supply-demand situation, which is widely looked upon by the global players 


UK, Paris and Chicago wheat nearby futures prices, 2003/04-2013/14




European wheat export prices