In July, U.S. wheat prices hit a four-year high, boosted by soaring corn prices

Question

In July, U.S. wheat prices hit a four-year high, boosted by soaring corn prices and worries about persistent dry-weather conditions in wheat-producing countries. At the end of July, the price of a bushel of wheat stood at $9.58 with approximately 70 million tons of wheat forecast for the U.S. at the end of the year. However, over the month of August, the wheat market experienced turbulence, with wheat prices decreasing 88 cents to $8.70 per bushel. The wheat forecast jumped to around 75 million tons of wheat. Which of the answer choices best explains these occurrences in the wheat market?

A. The National Weather Service forecasts that as much as seven inches of rain from the remnants of Hurricane Isaac could fall in parts of the wheat-producing Midwest. These heavy rains have the adverse effect of delaying the planting of wheat in the coming weeks.

B. More Americans are experiencing Coeliac disease, brought on by sensitivity to gluten, the protein found in foods processed from wheat. The awareness of the disease and other gluten allergies has increased “gluten-free diet” foods, such as cereals and pizza containing no wheat gluten.

C. Russia is the world’s third largest producer of wheat. Unlike two years ago when Russia suspended wheat exports following a severe drought, this year Russia said it had no plans to limit wheat exports, permitting its nation’s wheat producers to offer its wheat to other countries, including the U.S.

D. Corn prices in the U.S. are at record highs, primarily because of persistent drought conditions in corn-producing states. To feed livestock, animal processors, such as Tyson Foods, have switched to the purchases of wheat as a substitute in consumption to corn, resulting in more wheat demanded

Explanation / Answer

D. Corn prices in the U.S. are at record highs, primarily because of persistent drought conditions in corn-producing states. To feed livestock, animal processors, such as Tyson Foods, have switched to the purchases of wheat as a substitute in consumption to corn, resulting in more wheat demanded

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.