The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-01-09
An Interesting Business Situation.

An Interesting Business Situation.
For several days there have been
signs Of an increasing public interest
in, the wheat market. There have
important element on the outside that
follows the speculative markets, is be-
ing attracted by the activity of wheat
and the possibilities suggested.
This outside speculative element is
so important that no market observer
or commentator pretends to reckon
without it. It is the force that, once
entered into a market, brushes aside
all ordinary considerations. This was
the force that helped create the great
bull stock market of recent years, and
that cannot now be drawn back to
Wall street. The same force is operat-
ing to-day in cotton, and cotton is
higher than for thirty years. 1t has
entered into speculation in coffee and
coffee is far advanced over recent
prices and still on the rise. Whether
this force will. show itself in wheat is
d matter for consideration at this time.
The same opinion ventured upon
last fall, after careful analysis Of the
statistical situation, ito the effect that
wheat would sell much higher, has now
become current opinion, and predic-
tons of dollar wheat by millers and
grain men are heard almost daily.
Many failed however, to take this
view of it early in the crop year, and
have fought the rise thruout, while by
some commercial writers the advance
has been cried down to within day or
two. ...'.
Meanwhile the Minneapolis May OPP
ton has to this writing sold to SS3sc,
which is g cents above the figure of
the corresponding time a year ago.
The war possibility is Of course the
great speculative factor Of the mo-
: ment. Upon the opening Of HOSTILE
ties, or upon the announcement Of a
peace agreement violent turn up or
down would probably occur. There
would remain, however, the primary
causes for enhanced values upon
which were built the first arguments
for a rise that appeared In this paper
last fall, arguments, SO frequently
dwelt upon since then as scarcely to
bear further detailed repetition here.
In brief, it was possible months ago
to see that there would be no surplus
of wheat by the end of the crop year.
Just how soon and to what extent
prices would be affected was i'm
possible to know, but the broad gem
eral contention that legitimate supply
and demand conditions would I'LL
timately force an advance has been
more than borne out The question
now is whether an advance of 10 cents
over last year is sufficient to offset the
changed conditions. -...
On the arguments for a rise
originally advanced this is as much
a gain as had been expected up to this
time. Since then, however, the trade
has seen the development Of three new
factors, any one of which may have
In it the power. to bring a greater adj
vance. They are the war uncer-
tainty, the low condition of the winter
a wide area, and the possibility of a
sudden rush of outside speculative in
interest into the market.
A great rise usually starts on some
thing legitimate and sound. One
familiar with the cause and with the
thing affected can figure out approx
mately how far it ought to go. But
every one familiar with speculation
knows that to assume that it will
necessarily stop at that point is to be
wrong in a majority of cases.
Markets are often influenced as
much by sentiment as by anything
else. The summer of 1900 witnessed
Minneapolis wheat futures selling to
921s cents. The price had been in the
carried it up slowly and steadily, and
then the public came in and carried it
UP further with a rush.
When outside speculative interest
enters into market, the shrewdest
men in the trade withhold all express
sions of opinion based upon statistics
and matter ordinarily important, for
the outsider usually ignores all fig
ures in his operations and operates
on sentiment, and sentiment is a
thing indefinite and uncertain.
That is about the situation in wheat
to-day. One might take great pains
to show by statistics that wheat flu
lures in Minneapolis ought or ought
not to sell at a dollar. all of which
would count for nothing should out
4 side speculation come in. For, a year
the public has done nothing in stocks,
and even allowing for the surplus