The Aberdeen weekly. [volume] (Aberdeen, Miss.) 1878-1933, 1920-05-21


cerned. has little idea of how his grain is handled
after it reaches terminal market. He probably
wonders many times why the price he receives
for car of corn is lower than that received by a
neighboring farmer who shipped and sold at the
same time.
1t all resolves itself into question of what
grade" is put upon it by the official inspectors
appointed by the state in which his market is To-
Gated. Both>wheat and have four five
different grades, ranging from the best the poor
est, which of course quite a difference in
prices The matter of grading is not simple
as 1T sounds. In fact, In the case of grains,
corn especially, it is quite intricate process.
Each state in which the big terminal markets
are located, such as Chicago. Omaha Minneapolis,
and Kansas City has official inspection depart
ment and every car of grain of whatever kind
must be graded by the experts in these depart
ments before 1t is offered sale on the exchanges
cash grain.
Now cash grain might little or nothing
to the outsider, but to the man in the trade it
means grain intended for immediate delivery. The
cash grain department of the Chicago Board of
Trade. for instance, is 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 the floor
of this exchange more than 40O.OO0,OOO bushels of
grain are bought and sold each year The scenes
pictured in the cash grain department of the
Board of Trade are just interesting those in
the pits, but the general public hears little of this
branch of the board.
hall to the other 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
IS noisy, busting crowd and the aises between
the tables are crowded that passage between
the table is difficult.
Every man is in hurry. Hundreds of cars
of grain must be disposed of within couple of
hours. Each of grain is sold by sample. These
samples taken from the track in Chi
cop nv no Sfo TO lin ipcr
properly graded and tested and then sent
to the exchange. On each sample bag is marked
the kind of grain contained therein, its grade,
name of the consignee and number of the
Sales based 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
money for his prOpertySby using the, future
basis than he could if he operated q 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
grain is bought in the country guam
THY equal TO the amount purchased is sold in the
pit, provided the buyer has not previously
trrcted for its sale. Thus the buyer is protected
from heavy loss in the event of break in prices
while the grain Is route to Chicago, and he
can afford to pay to the farmer and work
on a smaller margin of profit He could not bid
the farmer fiat price and expect to 'hedge" his
purchase for by the time he is notified that his
bid Is accepted the market may be couple of
cents away from his quoted figure
1t also gives the farmer the benefit of contin-
uously active market; whereas. if he had to de-
pend entirely uIrn the demand from shippers and
cereal manufacturers. he would encounter fire.
quent dull periods. The speculative buying ''takes
up 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
operations for such is not the The specu-
lative trade continually watches the action of cash
grain and any lull in the demand materially in
creased buying of the spot" cash. grain is
quickly reflected in the pit -
The Illinois grain and inspection department
which prepares samples of grain for sale on .Ee
Chicago Board of Trade, has the reputation of be-
ing the most efficient of its kind in the country.
while none approaches it in the matter cf capacity.
1t has frequently handled more than 10000 cars
OF grain in month, and its record for a single
DAYS work done is $3.50 cars, of which .472
corn The latter Is more difficult to grade than
any other grain 1t requires the moisture test
recently established by the federal government.
The Offices of the grain inspection department in
Chicago employ IS deputy Inspectors. so grain
-~v =. $3.50