Commodities Downward

Throughout the U. S. wheatlands last week farmers stared dismally at the figures chalked on the blackboards of rural grain elevators. In Montana 12-c- was offered for a bushel of wheat, in Kansas 20-c-, in Nebraska 18-c-, in Texas, 30-c-. Farmers who thought that they had seen the worst possible prices last summer received new jolts daily.

Wheat prices at elevators are governed by the closing prices in the Chicago pit, the difference being accounted for by transportation and insurance charges. Last week the price was hovering around 49-c- before it slipped to 47 3/4-c-, then plunged to 43 1/8-c-. Statisticians burrowed into their records and announced that the price was the lowest recorded since 1852, four years after the Board of Trade was founded. Viewing the estimated North American surplus of 700,000,000 bu., economists predicted still lower prices. Where once $1 wheat was a bogey, 40-c- wheat seemed now a plain probability.

Farmers were inclined to blame much of the drop on the fact that last week Secretary of Agriculture Hyde suspended the rule on grain futures trading which required that all individual trades of over 500,000 bu. be reported. Shortsellers, claimed farmers, were thus given free rein. But in grain circles it felt that the drop was due to the withdrawal of bullish speculators from the market when it became plain that U. S. wheat, long buoyed above world prices by the Farm Board, was seeking a level which would make exports possible. Although the Farm Board has been out of the market since June 1931 its huge wheat holdings, estimated at 28,000,000 bu., and the prohibitive U. S. wheat tariff, have created an artificially high price for U. S. wheat. This year's U. S. crop of 712,000,000 is smaller than the average but enough to crush the U. S. market unless some of it can be exported. Exports can be arranged when Liverpool prices are about 12-c- above Chicago. A few months ago the difference was only 1-c- but last week's break widened the gap to 8-c- and the U. S. seemed within striking distance of competition with Canada, Australia and the Argentine for the markets of Europe.

Together with the Pit's slump, wheat tumbled in Winnipeg. Canadian prices have long been pegged at around 50-c-, a price which because of the depreciation in the Canadian dollar gives Canadian wheat an advantage in the world markets. Last week when the slump in Chicago narrowed the margin of advantage the Winnipeg peg was pulled. In a short time December wheat was selling at 47 5/8-c- in Canadian currency, giving it a 2 3/8-c- advantage over U. S. wheat. How this advantage works is seen in the September export figures. During the month Canada exported 28,607,000 bu., a 69.9% gain from a year ago while the U. S. exported 2,642,000 bu., a 77.5% drop. Competition in the export market will soon be increased when the new crops come in in Australia and the Argentine.

Other crops suffered with wheat. Corn sold down to a new low of 23 7/8-c-. In some sections this makes corn cheaper than coal. In Nebraska, the Colfax County Commissioners last week decided to buy corn at $8 a ton for the court house and rural schools rather than coal at $12 a ton. Cheap corn is an incentive to raise hogs. Last week hog prices had slumped to an average of $3.30, only 15-c- above the summer's low from which hogs rose to $5.00, ushering in a general rise in commodities and stocks (TIME, July 11).

Cotton rose during the week. At last week's price of 6.30-c- cotton remained safely entrenched above the summer's 5-c- low. Most other farm commodities remained quiet, only slightly lower.

Petroleum, copper and silver were the biggest movers among mineral commodities. The average of petroleum prices last week was up 2.4-c- to $1.01 a bbl., a gain of 15.7-c- from 1931. The refinery average of gasoline prices was up from 4.68-c- to 5-c-. Although the Texas proration regulations were declared invalid last week most oilmen felt that Texas producers want proration, that new regulations will be issued before production can get out of control. Carl Estes, editor of the Tyler Morning Telegraph and Courier-Times, urged oilmen to defend proration with shotguns, said that if any company tried to take advantage of the invalidation of the regulations, "we will fight them from Hell to Mog River." Copper kept slipping and some sales were made at 5 1/4-c- against the rally-high of 6 1/4-c-. Coppermen feel there is little chance of the international pact being renewed Jan. 1 but there will soon be an international conference in Manhattan with Belgium sending the inseparable Messrs. Camille Gutt and Fernand Pisart. Trading in silver has averaged about 800,000 oz. a day on the National Metal Exchange. One day last week it soared to over 6,000,000 oz. and there were excited tales of Chinese buying. The net result was that silver rose to 27.68-c- an ounce, up 3/4-c-.

At all-time lows last week was the money market. On the Stock Exchange call money remained pegged at 1%. Time loans (60 days) went begging at 1/2% against 3 1/2% a year ago.

This file is automatically generated by a robot program, so reader's discretion is required.