URL: http://www.agrimoney.com/news/high-insurance-safety-net-to-lift-us-wheat-sowings–5007.html

As shown in this news, the high insurance safety lifts up the sowings of winter wheat. I conjecture that the price of wheat a year later would decrease if there is no bad weather influenced.

This news seems to support my conclusion – as it says, the higher sowings of winter wheat would gain higher harvest next year, with good weather condition. Since the big supply and assumes that the storage cost is stable, the price of wheat would drop down.

There is an argument in the news focus on how big the “lift sowing” would be. US winter wheat sowings showed “slightly up”, while the analyst of Benson Quinn Commodities points out the insurance payout is attractive. To my conclusion, the difference between these two arguments is how big the price drops – slightly or bigger. If lots of farmers realize the attractive chances and raise up their sowing rate, there is no doubt about the increasement of supply in next harvest.

In addition, the news also points out a successive increase in sowings – which is another support to my conclusion. What need to be noted here is that the price would not show a jump drop, since “soybeans or wheat do not suggest large increases in wheat acres” and farmers need to harvest other productions before they adjust to the insurance rate.

That’s my conclusion from this resource and I think the news is very cool, because it could be helpful to make a long term delivery and I love wheat — whole wheat bread is healthy.