Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1920-05-27

therefore the person most con-
cerned, has little idea of how his grain is handled
after it reaches a terminal market. He probably
wonders many times why the price he receives
for a 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 q question of what
grade" Is put upon 1t by the official inspectors
appointed by the state In which his market is To-
Gated. Both wheat and corn have four or five
different grades, ranging from the best to the poor
est, which of course means quite a Inference in
prices. The matter of grading is not as simple
as 1T sounds. In fact, In the case of some grains,
cora especially, it is quite an intricate process.
Each state In which the big terminal markets
are located, such as Chicago, Omaha, Minneapolis,
and Kansas City, has an 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 for sale on the exchanges
as "cash" grain.
Now cash" grain might mean 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 a very active and important
one, furnishing the basis Of operation for the en-
tire market. This will be better understood and
appreciated when 1t Is stated that on the floor
OF this exchange more than 400,000,000 bushels of
grain are bought and sold each year. The scenes
pictured in the cash grain department of the
Board Of Trade are just as interesting as those in
the pits, but the 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
is a noisy, busting crowd and the aisIes between
the tables are so crowded that passage between
the table is difficult.
Every man is In a hurry. Hundreds of cars
of grain must be disposed of within a couple Of
hours. Each car Of grain is sold by sample. These
samples are taken from the cars on track in Chi
cage by the state grain inspection department,
properly graded and tested, and then sent over
TO the exchange. On each sample bag is marked
the kind of grain contained therein, its grade,
name of the c~onsignee and number of the car.
Sales are based On future prices, sometimes
at a discount, sometimes at a 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 can offer him
more money for his property by using the future
basis than he could if he operated on a ~iatprice
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
tity equal to the amount purchased is sold in the
pit, provided the buyer has not previously con-
tracted for Its sale. Thus the buyer is protected
from heavy loss in the event of a break in prices
| 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
the farmer a fiat price and expect to "hedge" his
| purchase, for by the time he is notified that his
bid is accepted the market may be a couple of
cents away from HIS quoted figure.
It also gives the farmer the benefit of a contin-
uousIy active market; whereas, If he had to de-
pend entirely upon the demand from shippers and
cereal manufacturers, he would encounter fire.
auent 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 70 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 case. The specu-
tatiye trade continually watches the action Of cash
grain, and any iuil in the demand or materially in
creased buying Of the spot" or cash, grain Is
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-
inc the most efficient Of its kind in the country,
while none approaches 1t in the matter Of capacity.
= has frequently handled more than 10000 cars
81 sra,a IL one month, and its record for d single
DAVIS work done is $500 cars, of which 1,472 were
corn The latter is more difficult to grade than
any other grain, SIS it requires the moisture test
recently established by the federal government.
The Offices DC the grain inspection department In
chica.o ensDscy Is deputy inspectors 20 grain