Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1920-05-25

cerned has little idea of how his grain is handled
after 1t reaches terminal market. He probably
wonders many times why the price he receives
for car Of corn is lower than that received by
neighbOring farmer who shipped and sold at the
same time.
1t all resolves itself into q 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 corn have four five
different grades, ranging from the best the poor
est, which of course means quite difference in
prices. The matter of grading is not simple
as it sounds. In fact in the case of some grains,
cora especially, it is quite intricate process.
Each state in which the big terminal markets
are located, such as Chicago, Omaha Minneapolis,
ana 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 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 very active and important
one, furnishing the basis of operation for the en-
tire market. This will be better understood and
appreciated when it is stated that the floor
of this exchange more than 4O0,OOOO0O 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 as those in
the pits. but the general prbc hears little of this
branch of the board
Stretching from one end of the great exchange
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, bustling crowd and the aisles between
the tables are so 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 car of grain is sOf by sample These
samples taken from the cars on track in Chi
cagO 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 cOnsignee and number OF the car
Sales based on future prices sometimes
at 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-
ducer and cash grain dealer. The producer is hen
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 fat-price
basis This is made possible by reason of the
dealers ability to hedge" his purchase in the
speculative market. BY hedging is meant that
Ms soon as grain is bought in the country guam
tfty equal 10 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 break in prices
while the grain is route to Chicago. and he
can afford to pay more TO the farmer and work
on Il 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 a couple of
cents away from his quoted figure.
II also gives the farmer the benefit of a contin-
uouSly active market; whereas, if he had to de-
pend entirely upon the demand from shippers and
cereal manufacturers he would encounter fire.
ouPnt dull periods The speculative buying takes
mn 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 I'm addition TO his hedging" protection It
must not he interpreted from this that the future
delivery market completely dominates cash grain
oneratiOnS for such is not the case. 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 the
CbicaCo Board of Trade has the reputation of be-
INC the most efficient of its kind in the country
while none approaches ii in the matter of capacity
II has frequently handled more than 80 600 cars
of grain i'm one month. and its record for a single
dev's work done is $500 cars of which 1,472 were
corn The latter is more difficult to grade than
any other grain. as II requires the moisture test
rereptIv established by the federal government.
The offices of the grain inspection department in
chicago employ - deputy inspectors. 80 grain