Straw, the primary agricultural waste, constitutes approximately 20% of the total biomass in the EU. Only a small fraction of the material is applied in various products, e.g., animal bedding, mulch, building, and composite materials, while a significantly larger portion is often burned in the field. This practice, while prohibited for several reasons, including the increased risk of fire and the release of carbon dioxide contributing to global warming, is still prevalent. Given the increasingly evident effects of climate change, EU legislation aims to reduce greenhouse gas emissions as much as possible. One of the strategies includes applying the cascade principle in the circular economy. This principle aims to use the entire raw material, in this case, cereal crops, such that the products with the highest added value, like cellulose fibers from cereal straw, are extracted first. The vast potential for utilizing lignocellulosic agro-waste sustainably arises from its status as the most abundant organic compound on Earth. Its significant presence, renewability, and biodegradability make it a desirable source for producing materials in numerous industries. This study examines the potential of wheat fibers, isolated from the straw of two distinct cultivars (Srpanjka represents an old variety, and Kraljica represents the new variety) primarily for application in technical textiles. The following testing methods were applied: determination of wheat fibers and residues yield, fibers tensile properties, length, moisture content/regain, density, morphology, and Fourier transform infrared (FTIR) spectroscopy. The yield of isolated fibers relies on the wheat variety and the climatic conditions affecting plant growth, resulting in fiber yields from 10.91% to 15.34%. Fourier transform infrared (FTIR) analysis indicates reduced peak intensity, which is related to hemicellulose and lignin content, suggesting their improved deposition following the process of chemical maceration. Wheat fiber quality was found to be comparable to cotton fibers regarding its density. However, they showed a significant difference in higher moisture regain (9.72–11.40%). The vast majority of the scientific papers related to wheat fibers did not indicate the length of the individual fibers obtained by chemical maceration nor their strength. Therefore, this paper indicated that both varieties demonstrated sufficient fiber tenacity (greater than 10 cN/tex) and fiber length (2–3 cm), stressing the spinning potential of these fibers into yarns and extending their use to the apparel industry. Moreover, our research underscores the feasibility of adhering to the zero-waste principle. A high percentage of solid waste remaining after fiber extraction (25.3–39.5%) was successfully used for biofuel production, thus closing the loop in the circular economy.