Wheat Field
Wheat Field

Grain

Grain is the collective term used to describe editable seeds harvested for human and animal consumption. Various grain types are an integral part of diets across the world which causes an increasing demand and volatility for these commodities. Grain production is strongly influenced by global demand due to the rising population growth and the weather is a significant factor in price discovery.

 

Grain Types

The different types of grain each have their unique specifications and qualities. Different areas around the world show a specific preference for a certain type of grain. The production requirements for each grain type are very weather specific and therefore the major production sites are located in areas across the world where conditions are best.

 

Wheat

Wheat is a grain, which is being consumed worldwide in a variety of different food types. it is consumed by both humans and animals and is the third most-consumed grain-type behind corn and rice. It is however the number one in terms of acres used for growing this grain. The following countries are the biggest producers of wheat (in decreasing order) China, India, Russia, United States and France.

 

Corn

Corn or Maize, as it is called in most countries outside the United States and Canada, is the biggest plant of the various grain types. Corn is worldwide the most-produced grain and the return-yield is continually increasing. The United States are the biggest producers of corn, followed by China, Brazil, Mexico and France. Corn is a major part in diets across the globe and can be found in various uses in food preparation. It is also used as animal fodder and is a much-used ingredient in the creation of bio-fuel.

 

Barley

Barley is a grain which will most commonly be known for its use in the production of alcoholic beverages such as beer, but is also consumed in various diets across the world and used as animal fodder. Barley is a popular crop for farmers as it is more resilient to weather effects and can be grown in different climates. Russia is currently by far the biggest producer of barley, followed by Ukraine, France and Germany.

 

Rice

Rice is a main ingredient in the diet of billions of people. It is consumed as a main course in many cultures or serves as a side-dish. Rice is popular thanks to its complex carbohydrates and low fat levels, which makes it a healthy food type. Rice production is quite different from other grain types as it grows primarily in highly moisture and hot climate. It grows in low tide of water and the process of harvesting rice is very labor intensive which makes countries with low labor costs very suitable such as China, Indonesia and Vietnam.

 

Futures Contracts

Grain Futures are heavily traded on exchange across the globe.

 

Wheat Futures

Wheat Futures contracts are being traded on three exchanges in the United States: Chicago Board of Trade (CBOT), Kansas City Board of Trade (KCBT) and Minneapolis Grain Exchange (MGEX). The main exchange for wheat futures contracts is the CBOT, which where the following contract can be traded:

Product Symbol ZW
Contract Size 5,000 bushels (~ 136 Metric Tons)
Price Quotation Cents per bushel
Contract Months March, May, July, September & December
Tick Size 1/4 of one cent per bushel ($12.50 per contract)

 

Corn Futures

Corn Futures are also traded on the Chicago Board of Trade (CBOT). The exchange employs the following specifics for a corn futures contract:

Product Symbol ZC
Contract Size 5,000 bushels (~ 127 Metric Tons)
Price Quotation Cents per bushel
Contract Months March, May, July, September & December
Tick Size 1/4 of one cent per bushel ($12.50 per contract)

 

Barley Futures

Barley Futures are being traded on the Inter Continental Exchange (ICE) Canada. The exchange employs the following specifics for a barley futures contract:

Product Symbol BW
Contract Size 20 metric tons
Price Quotation Canadian dollars and cents per tonne
Contract Months March, May, July, October, December
Tick Size $0.10/tonne ($2.00 per contract)

 

Rice Futures

Similar to wheat and corn futures contracts, the Chicago Board of Trade (CBOT) is the main exchange for trading rough rice futures. These contracts have the following specifications:

Product Symbol ZR
Contract Size 2,000 hundredweights (CWT) (~ 91 Metric Tons)
Price Quotation Cents per hundredweight
Contract Months January, March, May, July, September & November
Tick Size 1/2 cent per hundredweight ($10.00 per contract)