Evening star., 1949-01-02
Postwar Grain Boom
Halted by Largest
Harvest in History
By WiIIiom Ferris
Assooioted PrAss financial Writsr


war infiationary boom in grains
came to an end this year with a
resounding bang.
A good deal of the speculative air
was let out of the grain market
during a couple of hectic weeks in
February. Grain prices never got
back to the January highs. Before
the year ended the Government
loan program was helping support
prices.
Behind the price break loomed
the biggest all-around grain produc-
tion in American history. Corn and
rice crops set records. Wheat and
grain sorghums came up with the
second largest output in history
Oats produced their third largest
crop.
Grain experts at the year end felt
that, barring disastrous crop fail
ure or new world war, prices would
not climb to early 1948 peaks again
within the foreseeable future. 1t
was more likely prices would press
the Government support level next
year, they said.
The years big price news came
early - the February break. 1t
started first in corn and swept into
all other cereals, and also caused
some shakiness. in other commod-
tiles. Prices of industrial products
recovered and pushed to new peaks.
1t was a different story in grains
Drops Nearly 81 Bushel.
Cash wheat sold at a peak of 1912
bushel in Chicago January 10.
BY August II, after the winter
wheat harvest, the price had drop
ped to its years low of s215s4. Cash
corn fell from a high of $284 on
January % to a low of $1.37 on No.
vember l.
Grains played their customary
role along the political front, both
in international and domestic
affairs.
Domestically, the political experts
took another look at that price
break after the presidential election
votes were counted. The experts
concluded a majority of farmers
either stayed away from the polls or
voted Democratic, fearful that Re-
publican administration might re-
duce Government price support
levels.
internationally, the cold war
partly a battle between American
grain and Russian ideology-con-
tinued throughout the world. The
front line was in Europe. Signs of
industrial recovery in Western Eu-
rope were noted before the year end
by Economic Cooperation Admin
istrator Paul Hoffman.
Speculation Uproar Ends.
In the early part of the year, the
uproar over speculation, which had
started in mid-1947, rolled on un-
abated. 1t collapsed with prices,
but not until lists Of traders in
commodities futures were published,
including every one from obscure
mailmen to the Presidents private
physician.
A battle developed between the
private grain export trade and the
Agriculture Department. Both
claimed they could handle Marshall
Plan exports more efficiently. which
meant at less cost to the American
taxpayer An early decision to give
the export business back to the
private trade was reversed late in
the year.
The Agriculture Department re-
quested the Eightieth Congress to
give it power to set margins on grain
futures transactions, a move vigor-
ously opposed by grain exchanges.
Congress refused. But the request
was expected to be renewed in l949.
with the likelihood it would receive
more favorable consideration from
the Eighty-first Congress.
All these human arguments had
little influence on nature. Grains
and particularly corn, grew wonder
fully. The phrase corn forest" was
coined to describe mid-Western
prairies, where farmers filled their
permanent cribs with the yellow
grain, erected temporary cribs and
finally piled the grain on the ground
under make-shift covers.
Termed Years Best News.
The corn crop could we'll be called
the years best news for the most
people. Assuming it would be fed
on farms, it meant more chickens,
more eggs, more milk and-even-
tually-a little more meat. Some
experts wondered if a good part
would not be stored under the Gov
ernment loan instead of being fed
to livestock.
Outlook for the coming year was
even more confused than usual.
Aside from the perennial question
of the weather, which would deter
mine the size of crops, there was
the additional question of how much
grain Europe would need. Record
breaking exports have aided prices
since the wars end.
In the crop year starting July l,
1948. some drop in exports Is ex-
pected by the Agriculture Depart
ment.
With lower exports, high Gov
ernment price support level and no