Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-06
STRENGTH IN GRAIN
MARKET IS NOTED.
Withdrawal of Farm Board
Support Followed by Big
Consumer Demand.
BY OWEN L. SCOTT.

Special Dispatch to The Star.
CHICAGO, June 6-After resting
heavily for months on the Federal Farm
Boards $500, ooo, 900 revolving fund, the
wheat market. finally turned loose to
stand on its own feet, is showing sub
stantial independent strength.
The sudden. unannounced withdrawal
OF Farm Board agencies from the cash
grain markets on Wednesday caught
the trade by surprise and resulted in a
brief collapse of future contract prices
to the lowest since 1896. but the mar
ket quickly recovered its equilibrium.
Since then a real demand has been dis
closed from consuming sources, with
premiums continuing to prevail for
quality grain.
Surplus Problem.
Just what the future holds In this
most carefully watched market depends,
according to trade leaders, on two fac
tors. One Is the drought in the Cana
dian West, which government agencies
there describe as critical" The other
is the vast Farm Board holdings Of over
200 100000 bushels of last years wheat.
Until this grain is disposed OF, or a
definite policy for its disposal an
nounced. the grain trade will remain
inundated by it. The wheat was pur-
chased at price nearly 100000. 900
above present values and it is costing
the Government nearly 100000 every
month to hold. This led to rumors, now
denied, that the Farm Board was being
pinched for ready funds and was forced
TO withdraw from wheat buying in the
cash markets
The situation in Canada might sup
ply an answer to the Governments sur
plus problem. In that country be-
tween 100000 and $4,000, 900 Of the
22,O00,000 acres planted to wheat, are
involved in the drought area. A dry
Winter has been followed by a dry
and windy Spring, raising grave doubts
about the prospect for even a moderately
good crop. Failure Of the Canadian
crop would open up larger markets for
the American surplus.
Another consideration confronting the
wheat market in the immediate future.
Is that growing from the marketing Of
the new Winter wheat crop. A near
bumper yield of about $50 900, 900 bush
els is in sight Part OF this wheat
already is on the way to market with
a heavy run expected before the end of
this month. New marketing normally
results in hedging sales in the Chicago
market to protect buyers. These sales
must be absorbed By a trade much
diminished by the hectic DEVELOPMENTS
OF the past year. This causes some
worry about the stability of present
prices.
The American and Canadian price
levels in the futures market are more
than 10 cents above the world level at
the present time. The Canadian gov
eminent is substituting exports at the
present time by paying cents Of the
freight charge on every bushel of wheat
shipped abroad. This further ccmpli-
Gates the problem for the American ex.
porter
In the Southwest new wheat is said
to be selling at around so cents a
bushel, compared with about so cents
paid year ago. If the Farm Board
adhereS to its announced intention to
stay out Of this years market prices
will depend on a more free working of
supply and demand, with the outlook
made uncertain for a time by the Ca
madam outlook and by the Farm Board
holdings Of old grain.
Copyright, 1879