Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1920-12-08
REASONS GIVEN
FOR GRAIN SLUMP
Commission Man Sees Few Causes
For Real Pessimism. Bottom
Price is at Hand
CONFIDENCE RAPIDLY
BEING RESTORED
Many Factors to be Considered in
. Forming an Opinion as to Grain. !.
Prices
(By Robt. r. Harper)

The past few weeks have witness
ed one of the most severe declines in
grain prices ever recorded on the
Chicago board of trade. May corn
closed last week at 60 cents, which
is a decline of 81 cents from the
high of the season, namely S1.26.
December corn closed at GO SIS cents
which is 96cents less than it sold for
in June as the high price was $1.59
December oats on Saturday closed
at AZ 78 cents, which is decline of
AZ cents a blu. from the high quota
ton of last summer. December
wheat closed Saturday at $l.65 5-8,
which is $1.09 less than it sold for
on the 18th day of July. Provisions
have declined approximately So per
cent.
These declines should be sufficient
to discount the many pessimistic
views, and in comparison with the de
flation in other commodities, should
restore confidence to the grain hold
ers.
However, there are many factors
to be considered in forming an opir-
ion as to grain prices, and the first
one to consider is the supply
this year in comparison with last
year. The total visible supply last
week as against year ago is as
follows:
1920 1919
Wheat ...... 30,S24,000 92,900,00
Corn ......... 7,140,O00 1,166,00
Oats ........ 34,32S,00O 1928, 900
This comparison shows that there
was a large amount of both corn and
oats carried over from the past year.
This, on top of the largest crop of
corn ever raised, naturally makes the
supply far overbalance the demand
for corn and oats. Therefore, to be-
gin with, in explaining the big drop
in grain prices, we have the largest
supply on hand of corn and oats ever
recorded.
Another important fact is, at the
present time, there is no import duty
on Canadian wheat. The Canadian
farmer has been shipping his wheat
into the United States markets. The
milling trade remains dull and the
buyers of wheat hesitate so that the
millers are not buying much wheat.
This small milling demand is more
than offset by Canadian shipments.
The next thing to notice is the for
eign demand. European countries are
all in a bad financial condition and
since the republican victory there
seems small chance of their securing
addition loans. Therefore the de-
mand from Europe is at the very
minimum, as their exchange rates
are so unfavorable. French money
in exchange for American goods will
only buy 30 per cent of par. The
English pound will only buy 50 pei
cent of par, and German marks only
40 per cent par. The domestic de-
mand for all food products has de-
clined, due to the resale of food pro-
ducts by the United States govern.
ment and the general defation era
which is sweeping the country at the
present time. Since January, 1920
leather has decreased % per cent
copper % per cent, cotton AZ pei
cent and wool 80 per cent.
The general financial situation al
the present time is not one which
lends hope to the holder of grain
Banks in North Dakota are failing
because of the decline in grains, due
to large loans made to farmers
Large companies are being compel
led to borrow sums of money at ex
Orbitant rates of interest to pay bills
Money rates are very high and very
difficult to obtain. The failures thi.
past month are nearly twice as grea
as year ago.
The large liquidation of grain ha,
not yet started, as only few farm
ers who needed money are selling
However, with country elevator
stocks in many points at a minimum
more grain should start moving a
an early date.
| am in doubt as to whether I'll,
holding movement by the farmers
associations will be effective, al
there are so many renters with note,
coming due who will have to liqui
date their grain.
1t is safe to believe that a stabiliz
ing point will be reached within
short time and from then on we will
have a gradual strengthening a
money conditions improve.