Wheat is one of the most popular cereal commodity grown worldwide. More than 600 million tons are harvested every single year and it is only comparable to maize and rice in its quantity. Wheat is used in huge variety of foods- flour, bread, cereals, pasta and also animal feed. Other than that wheat can be used as a construction material for roofs. Global per capita wheat consumption is around 50 kg per capita.
As the crop is very difficult and expensive to harvest and it is prone to disease the Wheat ETF prices also fluctuate considerably. As the majority of the wheat production takes place in countries with huge territories- China and Russia the whole of the world is dependant on their weather and climate conditions.
Due to the draught in Russia in 2010 and the subsequent export ban on the crop the Wheat ETF prices went up sharply (more than 15 %). Lot of politicians have blamed traders and speculators for this kind of sharp inclines in the wheat prices.
If you are looking to get access to Wheat ETFs then here are some options-
ETF Securities Wheat ETF (WEAT)
ETF Securities Wheat ETF (WEAT) in commodity index that is open ended and tracks DJ- UBS Wheat Sub Index.
PowerShares DB Agriculture Fund (DBA)
DBA is based on the DB agriculture index which is managed by DB commodity services. PowerShares DB Agriculture Fund composes of futures of the most widely traded commodities, like corn, soybeans, sugar, live cattle, cocoa, coffee, lean hogs, wheat, Kansas wheat, Feeder cattle and cotton.
Even though DBA is not a 100% Wheat ETF it does offer a good diversification of all the main commodities.
PowerShares DB Agriculture Fund ( JJG)
PowerShares DB Agriculture Fund is a sub index of Dow Jones-UBS Commodity Index Total Return similarly to DBA JJG invests through futures, but only to 3 commodities- Soybeans 39 %, Corn 39% and Wheat ~22%. This Wheat ETF is primarily traded on NYSE (inception 10/23/07). S&P rating for this ETF is AA- and Moody’s rating Aa3.
Elements MLCX Grains Index (ETN)
This ETF has relatively low exposure to wheat, only at about 9 %, but also offers access to such commodities like corn, soybeans and soy meal.
Elements MLCX Grains Index Total Return (GRU)
This is a benchmark index for grains and for anyone looking to invest in commodities. It holds 4 commodities altogether- corn, soybeans, soybean oil and wheat. As it reflects 100% collateral investment the index is considered total return index
