The Waxahachie daily light. [volume] (Waxahachie, Tex.) 1894-current, 1906-12-10
BASIS FOR PRODUCER


Nes Orleans. Dec 10 The nsac
tlce ia some parts OF the Interior
OF selling cotton on the basis OF New
York instead Of New Orleans future
contracts costs ihe south several ml
lions of dollars a year said one of
the most consistent and Tclentssss
enemies OF the speculative bear lu
ail the cotton world . man who haH
fought many campaigns ia behalf uf
/ the staple. aud within the memory
at The present generation has never
been afraygd on ihp bear side 81
the market Having made life
tina" study of the science Of breaking
. bearish hniwafhs his deductions are
entitled jo careful consideration bv
he producer for the reason jt is iu
his interest that ne veteran spycola-
tor has pointed uut way for the
farmer 20 constantly obtain enhanced
yaluo lot his cotton
New Orleans "a @ producers mar
/ ket consequently the value OF a tu-
ture hedge Ina that market ls great.
er than "a similar hodge at New
/ York which is SPECTATOR market
with a contract designed so that the
/ bear may depre@s prices by the teu-
( der Of undesirable cotton. he ex.
/ piaiaed
! The farmer or Interior merchant
/ who sells his cotton at SO many
/ points ON the New York future
/ contract plays right into the hands
/ of the enemy The thing works out
( in this way The exporter sells cot
/ ton he does not possess and buys q
/ hedge iu New York, knowing at the
! time he sells 1t that that hedge will
/ not be worth any more a the time
Ehc sells IL than the New York bears
! can he p Thus the price the spot
! short Is able 10 pay for his actual
! cotton which he must base on the
! future values of the market in which
! he holds his protective hedge is al
ways limited by the restrictions Of
! that market
"On the other hand the farmer
! who demands that his price be fixed
| on the basis of New Orleans futures
| has this very decided advantage.
! New Orleans being a producers mar
! ket the contract being regulated by
natural grade differences and unde-
| sirablc cotton being so quoted that
shorts cannot tender tt to advan-
| tage. a hedge in that market is al
ways worth relatively more than "a
at New York. Thus, If the farmer
demands so many points on a New
Orleans future month the buyer will
find himself in a mole with a New
York hedge, consequently next
time he sells actual cotton short
he will buy his hedge in the New
Orleans market, and in this way will /
find himself in easy position to pay /
anywhere from > to 20 points more !
for bis actual cotton when the time 7
comes to sell his hedge and buy in /.
his spots thar would be the case if |
he held a New York hedge
These are technical matters i'm /
which the producer is not thorough /
ly .clsed bar which may be turned
10 immenaa advantage 70 make
IN, thing work out, all the interior
has to do is 10 invariably insist on
/ Il New Orleans basis instead of "a
! New York basis whenever i. o. b.
transactions we entered into. Bet
ter results should follow quickly"
MANY -t, sons OF the south have
Learned tu Disseminate i'm this mat
. tor Though practical experience.
IIIt other sections do not seem to
realize here is HLy difference Five
points enhancement ON d, .D.g roo
bales sold mean S2s additional prof
100 f1 He .,.I,l. . small ching .a b.
self but fUo aggregate amount of
such additional profit SIS very large
when One million or tenn millions of
bales is figured ON
Iu us last analysis. cotton values
.Hu. fixed uE the eluipu-c establish
'yd between the demands OF rhs pro-.
#"