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Wheat is a cereal grain originally from the Levant region near the East, but is now taken and used worldwide. The world production of wheat, in 2013, was around 713 million tons, making it one of the 3rd most produced cereals after maize and rice. In 2009, wheat became the second most produced cereal with a total world production of 682 million tons that year after maize and with rice coming in a close third.
Wheat is probably the most important global agricultural commodity, as it is a dietary essential in both developed and upcoming markets. With wheat being used broadly within the production of food, wheat appeals as a hedge against rise.
Wheat grains are grown more on land area than any other commercial foods. World trading in wheat is greater than many other crops combined. Wheat is, globally one of the leading sources of vegetable protein for humans. When talking about total production tonnages used for food, wheat is said to be second to rice as the main source of human food crop.
The yields of pure wheat per unit area have increased their methods of crop rotation and applied them to long cultivated land and with the use of fertilisers have become very widespread. Improved agricultural farming has lead to more recent machinery being built; recently they have included threshing machinery and reaping machines (also known as the combine harvester), tractor-drawn cultivators and planters. The great spread of wheat production and on new arable land occurred in America and Australia in the 19th and 20th century.
There are 3 main ways in which you can invest in wheat; through ETFs, Futures and Stocks. With ETFs there is currently only one U.S listed ETF which allows for pure play on wheat, the Teucrium Wheat Fund (WHEAT). This offers exposure to several future wheat contracts and includes a unique roll practice that helps the fund ease its way from the negative results and impacts of contango. With wheat futures there is a very large active market on the Chicago Board of Trade, whereby these contracts are traded via the symbol W (which is under the symbol ZW on the CME Globex). CBOT futures contracts display around 5,000 bushels, or around 136 metric tons. The contact months for CBOT tend to be in March (H), May (K), July (N), September (U) and December (Z) with the last day for trading being the business day prior to the 15th day of that contract month. When it comes to buying wheat stocks, there a few options available for you to use. Many of the agriculture business firms provide products and services towards farmers and the profitability of these companies tend to display a connection to the agricultural spot prices. Some of the largest agriculture business firms are Potash (POT), Monsanto (MON) and The Mosaic Company (MOS).
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