Buyer's Market

In front of the battery of telephone booths on the trading floor of the Kansas City Board of Trade, brokers stood in lines five-deep one day last week, waiting to call Harrison 6464. From offices and farms all over the Midwest, others were also trying to get the magic number of the Commodity Credit Corp.'s regional office. At Harrison 6464, the switchboard operators worked mightily to handle the traffic; more than 500 calls jammed their board. Everybody wanted to sell cash wheat.

Last week's deluge of selling ended the wait-&-see attitude which farmers had maintained since the February break in grain prices. The break had caught them with over 400 million bushels cached away for higher prices. They went on holding it against i) possible failure of the winter wheat crop, and 2) a resumption of CCC's eccentric buying, which had helped drive prices sky-high last fall.

But last week, the Department of Agriculture predicted another bumper wheat crop of more than one billion bushels, thanks to favorable weather and an increase in wheat acreage. Also, the CCC announced a new buying program that made sense. It began limiting its purchases to 1,000,000 bushels a day, and doing all its buying in one hour, between ii a.m. and 12 noon, C.S.T. (This kept down the rumors of Government buying which have frequently upset the market.)

There were other signs of surpluses ahead. Fortnight ago, the Government asked for offers to sell it 3,500,000 sacks of flour. It got offers of 5,500,000, nearly 60% more than it had tried for. When that news was announced last week, the grain elevator operators in the wheat belt began trying to unload. CCC's Kansas City office alone got offers of 2,000,000 bushels in the one-hour limit on Friday--twice as much as the daily limit CCC had set for all its U.S. buying.

By week's end, CCC had bought 6,359,801 bushels, almost enough to fill its April export quota, without driving up the price. Instead, the cash price slipped nearly10-c- at Kansas City to around $2.28; May futures at Chicago were down 9-c- for the week to $2.31. It looked as if prices would keep on going down as farmers unloaded. Said one operator: "Nobody is going to be foolish enough to carry his old wheat crop into June to compete with the new harvest."

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