ADVANCE IN WHEAT PRICES

Dominion, Volume 8, Issue 2417, 24 March 1915, Page 7

ADVANCE IN WHEAT PRICES

ENORMOUS SPECULATION IN AMERICA In reply to the question whether German interests, directly or indirectly, were endeavouring to corner American wheat, a well-informed authority, having a lifelong familiarity with the export grain trade, said to the New York correspondent of the London "Times" recently;

"It is possible, and even probable, that German interests have bought large quantities of wheat in the American markets. They would naturally make such purchases in the hope of being able to get them to Germany, either through such schemes as that recently attempted by shipment per Wilhelinina, or through neutral countries, or otherwise.

"Such a theory, however, is not accessary to account for tho big rise in prices in the American markets, although it may be, and probably is, one of the causes. The principal reason for the advance is the enormous volume of speculation in the American markets, especially Chicago, participated in by speculators throughout the country, including big men of the calibre of Armour and Patten, down to smaller people who buy 5000 bushels. Speculations of this kind grows by Mat it feeds upon. Those who have wheat bought at low pricos buy more when it advances. The higher it gets the more they buy, and many can never see the top, but hang on until something occurs to start a selling mania. "Added to this is speculation in Great Britain by the grain and milling trades there, and undoubtedly there is similar speculation in many other European countries, where prices are being, advanced repeatedly, notwithstanding that many steamers are at ports with grain that cannot be unloaded, and many more are due, according to recent cable advices.

"One of the most obvious reasons for the sensational advance of the past 30 days ha 6 been the urgent scramble on the part of the agents in New York of several European Governments to buy wheat. Their methods of buying have shown a great lack of judgment; in some cases purchases were made almost recklessly, and instead of keeping .their operations quiet, as good buyers should, their transactions were made public and exaggerated, telegraphed throughout the world, published in the newspapers, and used by brokerage houses as Dull news to urge speculators to buy more. While purchasing for tho British grain trade has not been so wild and rcekless as that for various foreign Governments, yet it also has been somewhat in the nature of a scramble, and their purchases have been used by American exporting houses to boost tho market.

"The enormous speculation on _ the Chicago market lias created a condition there that is practically a huge corner, or, speaking more accurately, 50 or 100 separate corners. The total 6tock of wheat which 1 Chicago has available for delivery on contracts i 3 now only about 379,000 bushels. On this stock untold millions aro being bought and sold every day, so that practically every brokerage house has a corner on May wheat in its own office. This congested condition makes Chicago prices in reality artificial and fictitious, and there is no reason why the grain trade of the rest of the world should follow such crazy operations. "Perhaps tho best advice that could be given would be for overybody interested to remain calm, not to participate in 6Uch markets as we are now haying, and particularly to avoid the Chicago market, leaving the speculators there to fight it out among themselves. Anyone who will calmly survey the situation will find from the grain trade statistics that there is no real scarcity of wheat.