Daily capital journal. (Salem, Oregon) 1903-1919, 1908-03-05
REVIEW OF WHEAT
MARKET FOR 1907
Effect of the Great Flood OF Cereals
Poured Out of the Argentine.

Chicago, Mar. 5.-The recent
flood of wheat from Argentine.
which broke the price of that com
modify nearly 20 cents in two
months and threatened Americas
lead in the markets of the world.
marks the end of an eventful 1z
months in that country's business of
growing and marketing grain.
Coupled with II is the story Of
millions Of money which the farm.
ers of the United States saved for
the country during the recent panic
by selling their wheat for May de-
livery to foreign buyers in October.
November and December at the high
prices which then prevailed.
Fifty years ago every farmer had
to wait until his crop vas harvested
before he could sell IL. and then he
had 70 accept the current price,
which usually was depressed because
of the over supply of grain at har-
vest time. The farmers of those
days did not dream OF the present
system OF buying and selling for fu-
ture delivery and which is the de-
velopment of years of study by the
merchants who stand between the
producer and consumer. by which
the producer is brought In touch
with a world market, and Is able at
any time to assure himself OF the
high prices due to prospective
shortage by selling his crop In ad-
vance for future delivery After
his contracts are made he need pay
no further attention to the state OF
the market. or any OF the hundred
and one unexpected things which
may occur to upset the balance Of
supply and demand and drive prices
lower. for he is secure In his con-
tracts and has his grain sold at
good price for future delivery.
This is exactly what happened this
winter in regard to May wheat
Thousands OF farmers sold their
wheat to European buyers on the
bulge in the fall OF 1907, and then
when Argentine began TO export mill
lions of bushels more than had been
expected, and the price dropped with
rush, they sat tight on their farms,
secure OF profits that in the aggre-
gate reach into seven figures.
To understand the situation, one
must know the record OF the exist
ing ~ months leading up TO the Ar
gentine shipment. During the first
half OF March. 1907. wheat prices
ruled ab low level. May. 1907.
contracts In the Chicago market
were gradually depressed until
74%c was recorded. March 21. The
depression was due 10 very large re-
ceipts OF spring wheat at terminal
markets, an increasing visible sup
ply. reports of large farm reserves,
207, ,O0O.000 bushels. heavy eompeti-
tive shipments by Argentine. India
and Australia. and a general aceu-
mutation OF supplies at home and
abroad.
Then came the FIRST reports OF
louse or green bug in Texas and
other portions of the far southwest
Prices began TO harden. slowly at
flrst, and the first week OF April saw
two cents recovery from the break
brought on by the features named
above. Experts were sent from
many leading houses on the various
grain exchanges 10 investigate the
existence OF the green bug In the
southwest. They reported the in
tested area In Kansas spreading 4
little later the green bug was found
In a few coanties in Nebraska. AMI
the price on May contracts was up
TO 97h as a result. As the pest bo-
came more prevalent and the facts
were made known through regular
trade channels the market became
broad and strong backed by a large
volume of public buying. May is,
contracts for the month were ad-
vanced 10 94h. May 16 10 SO
May II to99 y. May 21 TO 100 and
May 27 10sis. Prices for July and
September were forced to a premium.
July cent over May. September
price &c over top quoted for May.
The market had nautral reactions