Wheat

For a brief period last week the Chicago Board of Trade supplanted the New York Stock Exchange as the dominant U. S. speculative force; the Pit held the Floor in thrall. Stock quotations closely followed grain prices, and the procession was almost steadily downward until the last day of trading.

Many are the difficulties of the wheat market. Chief of these are, of course, the factors of supply and demand. Last week the visible supply of wheat in the U. S. was

159,000,000 bushels against 114,000,000 a year ago, and an average of only 47,000,000 for the last ten years. Other crops have been bountiful; the new U. S. crop is germinating. Europe is buying in small quantities, and from Argentina and Russia. These factors have created a generally lower level; more specific causes were suggested as helping last week's downpour.

Canada. The Canadian Wheat Pool operates by borrowing up to 85% of the value of the wheat it handles, usually liquidating in the fall. This year it has tremendous quantities of wheat in storage. When the Canadian Government recently started to investigate mining and oil stock brokers, wheat was dumped on the market by firms trying to get in shape. This started a price recession that further endangered the Pool's margin, and the Prairie Provinces pledged their entire resources to support the wheat market. The Pool's operators went to London to try to sell Great Britain their surplus. Last week these investigators were said to be returning to Winnipeg

"disappointed men." The rumor started selling. Other rumors had it that a great bear attack was being launched to break the Pool. Such an event would be an economic disaster of the first magnitude, and even the rumors served to cause further selling.

Legge. Selling in Liverpool, especially heavy one day, last week, was felt in Chicago. It was traced to despatches saying that Chairman Legge of the Federal Farm Board had announced he expected wheat to sell off some more. In addition, general disquietude was felt at the Farm Board's policy, and selling was encouraged among operators who had previously refrained in the belief that the Board's $50,000,000 would be used to support prices.

Rye. Long have there been rumors current that a corner has been attempted in rye, the operator being mentioned as "the recent inheritor of a $25,000,000 fortune, working from Providence with a former Russian grain expert as adviser." The pool's losses are placed at a minimum of $5,000,000 plus enormous carrying charges. Last week one story said the pool had suffered more losses, but another said they had sensed the impending wheat disaster, profited by a timely raid.

Prices. At the end of the week prices rallied as foreign buying and Farm Board support was expected. But the week had been disastrous. Condensed Chicago tables showed:

Low High Monday's Dec 1, Last Last Close 1929 Week Week Wheat (March) 1.32 7/8 1.074 3/4 1.14 1.03 7/8 Rye (March) .78 1/8 82 3/4 77 1/4

Australia. Apparently not profiting from the examples of Canada's difficulties with a wheat pool, last week the Australian government proposed a Federal Pool that would fix prices.

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