WHEAT POOL.

Hokitika Guardian, 1 March 1922, Page 2

WHEAT POOL.

bOiJULIAN AND'N.Z. CABLE ASSOCIATION.

LONDON, Feb. The “Morning Post’s” market correspondent says tne (biggest wheat corner on record is to be atteihpted. Last week the London flour trade agreed to stand in, and proclaimed: h rise of 2s oil all nours, making flour 4s within a fortnight. ■ The bakers at first refused to buy, but at last they agreed, and are increasing bread by Id per loaf, which has increased their profit to. the extent of -4s, which is their share oflhe exaction from the people. < This movement, like all its predecessors, is based on May options. Liverpool is already operating at prices indicating that the “bulls” intend to clear their profit by May 31st, The quantity of wheat to be held back for an advance of from 7s to 8s per bushel, amounts to 7,000,000 bushels. It' is held by Australian Speculators, who have succeeded in forming a group, and are supporting the Canadian and American syndicate, which

was ingeniously started as “The Wheat Inquiry Bureau.” The correspondent adds that these 18,000,000 quarters of wheat require £50,000,000 to manipulate them, but a profit of Is per bushel means £7,200,030 iu three months. Even thp borrowing of £50,000,000 at 10 per cent would leave a margin Of £6,000,000. *ne bakers are already assuming that the wheat price will go up to 64s Id per quarter, which is more than half; Tho wheat " bulls ” are aiming at lid for a loaf, which will enable the “ bulls ” to realise their £6,000,000 profit. Probably the speculators fear that the bakers may increase bread to Is per loaf, and vans bring about a return of the Food Controller.

The reasons which decided the speculators to concentrate upon wheat are three:—(l) There is a large amount of of unemployed capital which is usually used in the rubber, iron, metal, tea, and sugar markets, none of which are suitable for speculation at present. (2) There is a reasonable prospect of success before tne large wheat surplus from India can be moved. If, however, India ships to Britain 1,000,000 quarters of wheat monthly between June and the end of the year, the success of the corner after the Ist of July would he impossible for the rest of the year; (but hardly any new Indian wheat will reach Mark Lane before July. During March, April, and May, the market requires 8,500,000 quarters of which British farmers cannot find more than 1,000,000. The present stocks amount to about 2,000,000 bushels.. The consumer, therefore, requires 5,500,000 quarters landed by May 31st, not one sacx of which can come in if the corner holds together. The Argentine at present is outside the corner. The Argentine, indeed, is fighting the corner. The- prospects at present of this ingenious enterprise succeeding are increased by the heartiness with which the flour millers and bakers have put up bread Id a : loaf before they . were hurt.. The great wholesale operators may' possibly welcome' the control of bread prices, as they complain that the bakers are apt' to “ give the show away.”