The St. Charles herald. [volume] (Hahnville, La.) 1873-1993, 1920-06-19

laafter 1t reaches terminal market. He probably
wonders many times why the price he receives
F6er a Of corn is lower than that received by a
gmeighboring farmer who shipped and sold at the
sssme time.
1t all resolves itself into question of what
grade is put upon it by the official inspectors
aEppointed by the state in which his market is To-
Gated Both wheat and corn have four or five
&fferent grades, ranging from the best to the poor
~esf, which Of course means quite difference in
.a1rices The matter of grading is not simple
1t sounds. In fact, in the of some grains,
corn especially, it is quite an intricate process.
Each state in which the big terminal markets
Sare located, such Chicago, Omaha Minneapolis
land Kansas City, has official inspection depart
r1ent and every car Of grain of whatever kind
must be graded by the experts in these depart
gentS before ii is offered for sale the exchanges
.as "cash" grain
Now "cash" grain might mean little nothing
20 the outsider, but to the in the trade 1t
rsseans grain intended for immediate delivery. The
cash grain department of the Chicago Board Of
Trade for instance, is a very active and important
.one, furnishing the basis of operation for the
tire market. This will be better understood and
appreciated when it is stated that on the floor
of this exchange more than 4OOOOO,OOO bushels Of
grain are bought and sold each year. The scenes
pictured in the cash grain department Of the
Hoard Of Trade are just as interesting those in
the pits but general public hears little Of this
Branch of the board
Stretching from one end Of the great exchange
HALL to the other are long rows of tables heaped
with small paper bags containing samples of grain.
Buyers and sellers are rushing to and fro trans
acting their business and shouting their wants. 1t
fs a noisy, bustlng crowd and the asles between
the tables crowded that passage between
7the table Is difficult
Every is in hurry. Hundreds of cars
of grain must be disposed Of within couple Of
hours. Each car of grain is sold by sample. These
samples are taken from the cars on track in Chi
><.ago by the state grain inspection department,
properly graded and tested and then sent over
so the exchange. On each sample bag is marked
ghe kind of grain contained therein its grade,
x1ame of the consignee and number of the
Sales are based on future" prices, sometimes
at discount sometimes at premium depending
upon the quality of the grain and upon market
conditions.
This is done for the mutual benefit of the pro-
Queer and cash grain dealer The producer is ben
Gifted because the cash grain dealer offer him
xnore money for his property by using the future
basis than he could If he operated ON a fat-prce
basis This is made possible by reason Of the
dealers ability to hedge" his purchase in the
speculative market BY hedging is meant that
as soon as grain is bought in the country a guam
sity equal TO the amount purchased is sold in the
pit provided the buyer has not previously con-
Stracted for its sale. Thus the buyer is protected
while the grain is en- route to Chicago, and he
can afford to pay more to the farmer and work
on a smaller margin Of profit. He could not bid
1.-THE farmer a fiat price and expect to hedge" his
purchase, for by the time he is notified that his
did is accepted the market may be couple Of
cents away from his quoted figure.
Ii also gives the farmer the benefit of a cOntin-
x1ously active market; whereas. IL he had to de-
spend entirely upon the demand from shippers and
cereal manufactu he would encounter fire.
.ouent dull periods. The speculative buying takes
xyp the slack" at times when the cash demand lags
and provides more satisfactory trading conditions.
This advantage is also shared by the cash grain
dealer In addition to his hedging protection. 1t
must not be interpreted from this that the future
delivery market completely dominates cash grain
operafons for such is not the case. The specu-
.atiye trade continually watches the action of cash
grain and any lull in the demand or materially In
creased buying of the "spot" or cash. grain L.
quickly reflected in the pit
The Illinois grain and inspection department.
which prepares samples Of grain for sale on the
Chicago Board of Trade, has the reputation of be-
fng the most efficient of its kind in the country
uhile none approaches it in the matter of CAPACITY
xf has frequently handled more than 10000 cars
of grain In one month, and its record for single
DAYS work done Is $3.50 cars OF which 1.472 were
corn. The latter is more difficult to grade than
xny other grain, as 1t requires the moisture test
recently established by the federal government.
eerhe Offices Of the grain inspection department in
Chic: 20 employ % deputy inspectors. 30 grain