You’re a commodity trader and you’ve just heard a report that the winter wheat harvest will be 2 billion bushels, a 40 percent jump, rather than an expected 30 percent jump.
a. What would you expect would happen to wheat prices?
A) You would expect wheat prices to decline, since the supply of wheat is greater than expected.
B) You would expect wheat prices to stay the same.
C) You would expect wheat prices to increase, since the supply of wheat is less than expected.
D) You would expect wheat prices to decline, since the supply of wheat is less than expected.