| Types Of Wheat
A rose by any other name may be a
rose, however Wheat by any other name is not Wheat. There are three main
types of Wheat with active, liquid futures contracts traded on them: Soft
Red Winter Wheat (Chicago Board of Trade), Hard Red Winter Wheat (Kansas
City Board of Trade), and Hard Red Spring Wheat (Minneapolis Board of
Trade). In futures vernacular, each type of Wheat is typically referred to
by the city in which it is traded, such as Chicago Wheat is used instead
of Soft Red Winter Wheat, while Kansas City and Minneapolis refer to Hard
Winter and Spring, respectively.
Though there are many different varieties
of Wheat grown throughout the world, such as Soft/Hard/White/Red, there
are only two main classifications of Wheat, winter and spring. Winter
Wheat is planted in the winter and Spring Wheat is planted in the spring,
hence the names. Each particular type of Wheat, Hard Red, Soft Red, Durum
and White, requires slightly different climatic conditions for growth and
is best suited for each type. The most prevalent class of Wheat grown in
the Untied States is Hard Red Winter or Kansas City Board of Trade Wheat.
Hard Red Winter Wheat is grown predominantly in Kansas, Nebraska,
Oklahoma, and the Texas panhandle. The cold, sub zero winters and the
general lack of precipitation make these regions of the country ideal for
Hard Red Winter Wheat production.
The primary use of Hard Red Winter Wheat Flour is for bread making.
Hard Red Winter
(Kansas City)
Soft Red Winter Wheat futures, the
most actively traded Wheat futures contract, are traded on the Chicago
Board of Trade (CBOT). The first modern futures contract was for Soft Red
Winter Wheat. Soft Red Winter Wheat is grown in diverse areas of the
country, central Texas, towards the northeastern Great Lakes and east to
the Atlantic. Soft Red Wheat is grown in more humid environments, not
suited to hard grain production. The flour from Soft Red Winter Wheat is
used to make cakes, cookies, snack foods, crackers and pastries.
Soft
Red Winter (Chicago)
Hard Red Spring Wheat is grown in the Northern
Plains states where the winters are too severe for Winter Wheat
production, but the rich black soil and the dry, hot summers make it ideal
for this type of wheat. The major producing states are Montana, Wyoming,
North and South Dakota, as well as Idaho. This high grade Wheat is
suitable for milling and used primarily in breads.
Hard Red Spring (Minneapolis)
The other varieties of Wheat grown
in the United States are Durum and White Wheat. Durum Wheat has the
hardest of all the wheat kernels. It contains the highest proportion of
protein of any of the classes of wheat. This Wheat is primarily used in
the production of pasta, spaghetti, macaroni and other various pastas. Due
to its high protein content, Durum wheat flour is not suitable for breads
or pastries. Both Winter and Spring Wheat strains are grown in the United
States, primarily in Michigan, New York, Oregon, and Washington. White
Wheat accounts for the least amount of acreage grown of any of the Wheat
varieties. White Wheat is often substituted for Soft Red Winter Wheat
since its protein content and texture mill into a flour is suited for
similar purposes (cakes, cookies, snack foods, crackers and pastries).
Each of the exchanges does specify a
specific type and grade of Wheat for delivery against its contract, most
of the exchanges allow for substitutions at variable price differentials
(premiums or discounts). Because of the major differences in the
production cycle and uses of Spring and Winter Wheat, we have broken them
down separately on the following pages
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