Investing in Wheat: A Beginner's Guide to Commodity Futures

Investing in wheat commodity is one of the more common types of commodity investing. Wheat is the commodity with the second largest production quantity in the world, behind corn. Here are the basics of how to get involved in wheat commodity investing.

Futures Contracts

The most direct way to get involved in investing in wheat is through the use of futures contracts. With these, you are actually purchasing a contract to buy a certain amount of wheat. One contract is equal to 5000 bushels of wheat. You can get a futures contract from the Chicago Board of Trade when wheat is traded. Wheat is only available to be traded during the month of March, May, July, September, and December. In order to get involved in this market, you will have to open an account with a futures broker. They will give you direct access to the wheat futures contract market.

Mutual Funds

In addition to dealing directly with futures contracts, you can also purchase shares in a mutual fund that deals with wheat. There are many commodity funds available in the market that invest directly in wheat. This will allow you to purchase shares of the mutual fund through your existing brokerage account.