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Wheat Futures Trading Basics
Wheat futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of wheat (eg. 5000 bushels) at a predetermined price on a future delivery date.
Wheat Futures Exchanges
You can trade Wheat futures at Chicago Board of Trade (CBOT) and NYSE Euronext (Euronext).
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 .
| Exchange & Product Name | Symbol | Contract Size | Initial Margin |
| CBOT Wheat Futures (Price Quotes) | W | 5000 bushels (Full Contract Spec) | USD 3,375 (approx. 12%) (Latest Margin Info) |
| Euronext Milling Wheat Futures (Price Quotes) | EBM | 50 tonnes (Full Contract Spec) | EUR 700 (approx. 10%) (Latest Margin Info) |
| Euronext Wheat (No. 405) Futures | WHT | 100 tonnes (Full Contract Spec) | GBP 800 (approx. 7%) (Latest Margin Info) |
Wheat Futures Trading
Consumers and producers of wheat can manage wheat price risk by purchasing and selling wheat futures. Wheat producers can employ a short hedge to lock in a selling price for the wheat they produce while businesses that require wheat can utilize a long hedge to secure a purchase price for the commodity they need.
Wheat futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable wheat price movement. Speculators buy wheat futures when they believe that wheat prices will go up. Conversely, they will sell wheat futures when they think that wheat prices will fall.
Related Articles
- Buying Wheat Futures to Profit from a Rise in Wheat Prices
- Selling Wheat Futures to Profit from a Fall in Wheat Prices
- Wheat Options Basics
- Wheat Call Option Trading Basics
- Wheat Put Option Trading Basics
- Hedging Against Rising Wheat Prices with Wheat Futures
- Hedging Against Falling Wheat Prices with Wheat Futures
How to Start Trading Wheat Futures
To buy or sell wheat futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as optionsXpress lets you trade futures and futures options as well. optionsXpress also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.
