Even though last week’s decision failed, as for the present I will still choose a long wheat contract, because the drought has always been a big problem in USA. In spite of in short term harvest will make wheat prices down, the total supply will still exist shortage ( increase in demand and decrease in supply ).
On the other hand, Russia’s economic minister warned that grain exports could be restricted if domestic prices continue to rise following a severe drought in that country, and traders said the Russia news prompted a round of short covering. At the same time, Japan’s farm ministry said it plans to import 1.21 million tonnes of wheat for use in animal feed, an increase of 58 percent from its March estimate. Also, the United States is a major wheat-producing country, with output typically exceeded only by China, the European Union, and India. The drought made wheat reduce, Plus the Russian (one of the world’s biggest wheat exporters) export restrictions and Japan (one of the largest wheat import countries) needs increase. This will eventually lead to demand greater than supply. From this perspective, predict the price of wheat will go up. And I will continue to focus on the news, policy about agriculture market and change investment strategy timely.
http://topics.nytimes.com/top/news/science/topics/drought/index.html