Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-12-20
COTTON
MARKET IS PROVING
MYSTERY TO BEARS
Nothing Mysterious" About
Values Keeping Up-Fac-
tors in Advance Enuner~
ated
BY ESTES DOREMUS

The strength of the cotton market
in the face of the governments esti-
mate of the 1921 yield accounting for
100000 more bales than the end
September condition figures fore
cast is proving troublesome to the
bear element to such an extent that
the situation is described by some as
mysterious"
AS a matter of fact, there is moth
ing mysterious about it. Facts that
stand out like the proverbial sore
thumb account for the firmness of
values.
In the first place, it is generally
agreed that cotton today is intrinsic
ally worth more than present quo
tations, which range fronts to 1880
cents.
Secondly. political news is distinct
ly favorable, even the furry caused
among armament delegates by the
latest demands of France failing to
shake confidence in the ultimate out
come of the conference.
Thirdly, the spot situation, harden
ing on all temporary recessions, still
is potent factor in bolstering
prices, and
Fourth, the market is undeniably
oversold, largely through hedges.
In connection with this last factor
there is a well-grounded report that
considerable portion of this sea-
sons crop already has passed from
the hands of the farmer, though it
has not yet reached the ultimate con-
sumer, and that it is hedged bale for
bale. What percentage of the yield
is thus held, Of course is problemat-
ical, estimates ranging from one
third to one-half of the visible sup
ply.
What, then, will be the result Of
this situation? .rt
Trade Revival Seen
I The answer will be found when
these hedges begin to be taken up.
1t means buying movement on the
part OF present shorts that will ac-
celerate a buying movement on the
part of professionals, and the south
if it is wise. And any kind of buy
ing movement is certain to have
healthy effect on values, especially
in view Of the fact that the technl-
cal position of the market today IA
vors the bull side for a long pull.
This is the consensus Of opinion OF
experts who have made close study
of conditions.
There is a feeling, and it is be-
coming more general every day,
that the first of the new year will
see an opening of trade channels
that will call for the actual cotton
in quantity. that the policy of hand
to,mouth buying in this country
will end with 1921 when Europe is
expected to seek it's share of the
raw material, and that anyone who
is bear on anything American will
be rewarded only with vain regrets.
C. P. Ellis & Co., of New Orleans,
appear to have struck the Keynote
of the situation in the following let
ter, which has made profound I'M
preston wherever it has, been read:
"In the crop reports this season
the government has blundered bad
ly. From a forecast October OF
100000 bales on an acreage OF 26.-
900 900, they now tell us that the
crop will be 100000 bales larger,
and they add upwards of 5,OOO,OO0
acres to the area which they told us
October / had been devoted to cotton.
Mark Overshot
"Their very labored and unsatis-
factory arguments in attempting TO
accommodate these unprecedented
discrepancies are wholly unconvlnc-
ing to the intelligent element of the
trade, and naturally their conclud-
ing figures are generally regarded
with skepticism. They would ind1-
cate that many states have yet to
gin six per cent to more than 70 per
cent of their product. This we do
not believe. 1t could only be eX-
planned by the theory that much cot
ton was carried over in the seed last
year. and this, in view of the prices,
we likewise do not believe.
1--WE do believe that government
statisticians have overshot the
mark, just as their guess of October
1 undershot the mark and proved to
be wholly untrustworthy. No repu-
table crop authority has put out gin
ming figures up to date, but have
indicated that ginning was practical
ly complete at the last returns. The
s-Picayune and the Memphis
Commercial-Appeal, usually very safe
guides, are on an average, a quarter
of a million bales below the govern
ment. We prefer to pin our faith
to them rather than the admittedly
slipshod federal methods which are
enumerated in the official apologize.
"But suppose we admit everything
the government says to be true. In
1S79-9S, a season very similar to this,
we produced POI pounds to the acre.
This year we produce only 126
pounds to the acre, due to exhaustion
of the old lands east of the Missis'
sippi and to the startling ravages
OF the boil weevil, which after n
years of experiment, we have found
no means 20 control.
Better Values Inevitable
"In recent years, on an acreage
of 36,000,000, we produced 10000, 900
bales. This year, admitting the gov
eminent figures to be correct, We
are producing crop of eight and
quarter million on an acreage OF
80 100000, meaning one-quarter of a
bale to the acre, a reduction almost
wholly due to the spread and the
whitening destruction of the, bob
weevil. What profit, If we increase
the acreage next year to thirty live
or forty million, if that bug were
there to destroy 1t?
"It can't be done.
"That the wold's consumption OF
cotton is increasing and will con
tinue to increase is no matter OF
question. but an incontrovertible
fact. On the other hand, the south's
ability to produce has been severely
tested this year and we have fallen
short.
"In our judgment. the certainty Of
an expanding consumption, and the
great uncertainty of an equal pro
ductive ability, render higher, and
possibly much higher, prices for cot
ton inevitable as time passes. Ir
fact unless we can devise some
means of destroying the weevil, we
can visualize a situation in the fu
ture which will require the finding
of some substitute for cotton fol
textile purposes.
1.-THE world is surely and steadily