Cultivated worldwide, wheat is a grain, which has always peaked investors’ interests, as it is one of the most important food components. Trading wheat CFDs allows traders to participate in the agricultural markets without holding actual tons of wheat.

Wheat is a predominant food staple and has stamina in harsh climates. Another advantage of wheat production is the grain can be harvested in a fairly short amount of time, and there is such a ready supply of wheat, even though it comes in second to maize, it is a crucial element of the world’s agricultural commodity trading network. These factors contribute to the growing demand for the commodity when trading wheat.

Wheat Price influences

As with every commodity, there are multiple factors that affect the grain market. In particular, weather plays one of the biggest roles in the harvest of wheat. Even though wheat is a robust grain, massive droughts or floods will negatively affect the supply of wheat, which lends itself to increase the harvesting/production process on all wheat products, therefore increasing its price in the market. Most wheat futures charts will show an upward trend in the demand of the produce; however, factors such as a change in government policy regarding import can affect wheat trading and in turn wheat trading price. New agricultural technologies can also affect the trading price of wheat as production costs can vary depending on the method of harvesting the grain, hence, creating a surplus of crop, which could decrease spot prices temporarily. Changes in demand and prices of competitor commodities, such as corn and rice, will also directly influence the price of wheat.

With the European Union producing 152,000 thousand metric tons of wheat annually, China (133,600) and India (106,210), they are amongst the largest producers of wheat worldwide. Countries that are in the highest demand and consume the most wheat are countries that mostly experience high food prices. These are generally poorer countries and also those where the consumption of wheat for livestock in countries that thrive on importing and exporting meat or ‘wheat feeding’ bi-products. It is also worth considering that other competitive products that either decrease in availability or increase price will have a direct effect on the consumption of wheat in any country. The countries that are the highest consumers of wheat are China with an annual consumption of 131,000 (thousand metric tons) with India at a consumption of 96,725 (1000 metric tons) and Australia using the wheat for feeding their masses of livestock.