The Washington herald., 1915-01-01
The Rise In Wheat Prices.

The feature of markets is the continued
rise in wheat There has been an advance OF
about 10 cents bushel in wheat in the last two
weeks, and the price of most of the principal
options is higher than it has been at any time
this season. 1t will be remembered that sensa-
tional rise in the price of wheat occurred during
the summer, Immediately after the outbreak OF
This mostly because of speculative buy
ing induced in anticipation of an extra demand for
wheat from foreign countries later After this
speculation had its course wheat fell because
of profit taking sales by the spectators who had
previously bought; and up to a short time ago the
prevailing sentiment in the grain trade was that
wheat had touched its high point. But in due
course buying of American wheat for the genuine
account Of foreign nations-that is say buying
that entirely nOnspeculative-set in with such
force as to again lift the price of the commodity
to new high levels. At present about 100000
bushels of wheat bought every day in the lead
ing grain markets of the country by the agents of
foreign consumers. The foreigners would appar-
emily, like TO make all their purchases OF cash
wheat, wheat for immediate delivery, if they
could get it; but in great part they only get
wheat for delivery later in the season, and, there
fore, are forced to buy options, contracts for
the future delivery of wheat rather than the actual
wheat itself OF the huge surplus store OF wheat
the season there remained on December only
I3o,ooooOo bushels. If exports, of wheat continue
at the rate which they running, entire
expectation surplus OF the article will be exhausted
by April I. and probably before that time
What effect such tremendous movement out
OF the country will have the domestic price OF
the article is of course obvious. 1t might be sup
posed that advance in price would check foreign
buying and it would under ordinary circum-
stances but people in the grain trade say that the
matter OF price seems to mean nothing to the
foreigners and that all the indications are that
they would purchase just freely if the grain
market was IS cents bushcl higher than it is. |
The chief matter that seems to be bothering the
export trade is the difficulty of securing ships with
which to carry the Atlantic the large amount
of grain that Europe wants. Nor does advancing
ocean freight rates for grain seem to check the
demands OF exporters. Exports from the United
States last week OF wheat and -four were more |
than 100000 bushels, the largest ever known in
a similar space OF time. Under ordinary circum-
stances, Europe usually requires about 100000
bushels OF wheat week at this time of the year,
and the exports from all countries to Europe
usually average that amount. To put the matter in
a nutshell. the United States alone shipped more
wheat to Europe last week than all the rest OF the
world usually ships in a week in normal times
Up to short time ago this export demand for
wheat affected little, ii ALL the price OF -four for
domestic use and the foreign shipments OF bread |
stuffs were looked upon as an unmitigated benefit |
to the country. But the unprecedented inroads !
upon our wheat store has at last Influenced the |
price of -four. Flour is quoted almost
$500 a barrel higher than it was before the war
broke out This sort OF thing cannot continue very
long before it will cause injury to the small re-
tail bakers at least in the great cities and may
very likely force good many OF them out OF busi-
ness Flour is selling at price where the |
profit that many small bakers make in their busi-
ness is nearly absorbed as long as they continue
to sell oaves OF bread OF the size formerly
at the price. Ii these conditions hold, at
least il they become intensified, the small bakers
must either advance the price Of bread or reduce
the size OF their loaves. The disadvantages OF the
situation will naturally not be so pressing against
the large bakers against the small ones, but
they too will suffer il the pressure continues.
1t may be borrowing trouble, but it readily
be that state OF affairs may result from all
this which will be nightly bothcrsomc to those
responsible for the enforcement OF the antitrust
law. The bakers can protect themselves in meas
urc against the adverse contingency to which VIC
have alluded, by agreeing among themselves, or
through their various associations, to advance the
price OF bread but this will be conspiracy under
the Sherman law, and the United States district |
attorneys, under the howl that the public will
surely set up, will be forced to act. We will then
be confronted with situation in which the far
mors all over the country may agree not to sell
wheat under certain price and cannot be prose
outcd for such agreement, while the bakers will
be prosecuted, or at least will be in danger of
prosecution for making exactly a similar agree
ment regarding -four, the product OF wheat.