THE BREADSTUFFS AND PRODUCE MARKETS.

Otago Witness, Issue 2813, 12 February 1908, Page 8

THE BREADSTUFFS AND PRODUCE MARKETS.

Friday. The world's wheat markets continue to show depression, and prices ha\e been tending downwards during the past week. Recent London ad\ices state that the heavy American and Argentine shipments have counteracted the effect of the reduction in the bank rate. This Is confirmed by the London cable of Tuesday last, which reports the \Tark Lone market quiet and Is per quarter lower on the week. Perhaps the most significant, news, however, is of the sale of an Australian steamer parcel, March shipment, at 38s. or 9d per quarter below the price realised for JanuaryFebruary shipment in London just before Christmas, when the market was at its lowest point. This means that not only has the Mark Lane market lost the effect of the temporary recovery at the beginning of the year, but has actuaLly receded to the level of September last, prior to the record rise, which lifted prices up to 44s per quarter. Now the discussion opens as to whether the London market will continue to recede until the influence of the growing crops in Europe and America begin to manifest itself in April next, or whether, justifying confident anticipations, March will see a sharp upward movement in prices. So far as can be judged at this distance from the great sources of supply, the key of the future course of prices is in the hands of America. The elaborate financial arrangements which in a normal year characterise the handling of the wheat crop in the United States have been completely disorganised; thus it is that growers generally, tempted by the favourable price — for dollar wheat is the American growers' ideal— have been rushing their crop to the quite recaidloes of the future of home requirements. Consequently Argentine Errovvers. in face of the possibility of the largest yield on record. ha\e been competing with the United States exporters. As a result the market has been depressed ow ing 1 to the abundance of offerings. But if statistics are to I>e trusted, at any .moment America may wake up to the fact that she has over-exported, and the effect of such an awakening would immediately send prices up with a rush, the Argentino rates would at once harden, and the upward movement develop in all its strength. The news that India may have to import wheat this season, in place of being a large exporter, is pnother factor of strength. As we have already hinted, the element of doubt arises in the possibility that the factors of strength may not have time to develop ere the influence of the next hardest is shed on the situation. Thus the conclusion is forced uuon the student of the world's wheat position that anything may happen, and that operators will need to exorcise the greatest caution if they are to come out on the right side.

Under date London, December 27, " Beerbohm " enlarges upon the points to which we have alluded :—: —

The market during the pa={ =even day* has bssn somewhat irregular The holidays have naturally, interfered with business, but the reports legarding the condition of the Argentine crop have, of course, had the most influence. These leports were distinctly unfavourable at the- close of last; week, and the market became quite buoyant. This week the reports are better, and on the few days ■upon which business has been practicable there has been very little life. To-day there is a firmer tendency owing to the American improvement and, especially to the serious ciop news from India, with a probable area, under wheat in India below 20 million acres, as compared with 29J millions last year ; it will be seen that the possibility arises that India may even have to import wheat next season. Such a condition of the Indian crop removes what might have Later become a very depressing e'ement, and the trade 19 now able to concentrate its attention upon the two remaining factors in the position — viz., the ability of Argentina to export whe*at in the coming six months and the power of America to maintain for any length of time a liberal rate of shipments. The Argentina crop, it 13 now quite expected, will be a large one, but, with practically no increase in the area, sown, it would not be reasonable to

' expect the crop to largely exceed that of lpst year: if it lie allowed, that the exports to Europe may exceed those of last year by 2J million qtiarters, we suggest that a very optimistic view will be adopted. The capacity of I/a. Plata to export wheat from January 1 to Juns 30 may be. arrived! at in a measure by the following comparison, of the past four years exportß, showing tho totals for the first quarter, the first six months, and the whole year: — ARGFriiifE Whevt Expohts to Europe. Jan. 1 to Whole First quarter. June 30. year.

Ihe exports in the first six months of the present year were, it will be seen, the largest lecorded for this period, and they averaged nearly 400.000 quarters per week. If »U E oea wel: with the crop this year it may be ref™ n™ as P° ssib:e th a* an average ef nearly 500,003 quarters may be reached in the coming year from January 1 to June 30. Such a. total would, of course, be altogether insufficient for European needs, which may ba put, we think, at a minimum of 1,150,000 quarters pel week, unless backed up by large ship, ments f lO m America and Canada, it being now tolerably clear that liberal supplies ar» not to be expected from any other source. The key to the future course of prices is therefore evidently in the hands of America. Considering the state of the London market, this week's Commonwealth quotations show considerable firmness In Sydney milling wheat is quoted at 4s 4d as against 4s 6d last week; Melbourne is Id per bushel better on the week, and stands at 4s 4d; while Adelaide has receded to London parity, and stands at 4s l£d. The following extracts from recent Australian nlos give valuable information as to tho trend of the markets: — Farmers have continued to store their sunplies (reports the Sydney Mail of 29th ult ) though some have accepted the rates offered' It was expected by millers «.nd shippers that growers, in view of the lowering of rater would have shown a disposition to sail, but with a few exceptions holders generally were not inclined to do business. Orders for parce.s have been daily forwarded to Adelaide where buyers can get more favourab'e rates and consequently a number of cargoes are being shipped. At the commencement of last week the wheat market became easier, and buyers' rates also were reduced. The declino was due to the European markets being weaker, and to city millers continuing their policy of not purchasing at the current rates* which were too high for the export flour trade. Shipping wheat at the prevafing pi ices was out of the question unless exporters -wanted to incur a considerable loss on their operations. During the past few days the Melbourne and Adelaide markets showed a better tone. , The holiday caused a cessation of business at Sydney on Monday, and operations for the current week were commenced on Tuesday, the market being quiet, and the rates for wheat delivered at Sydney were: Buyers, 4a _5d to 4s 6d per bushel ; sellers. 4s 7d. 1 The Sydney export trade in flour has been stopped in consequence of wheat prices being too high for millers. The transactions in flour have been confined to supplying bakers' , wants, and the rates have remained as fol- • low — New flour. £10 10s per ton; old, JEU; country brands, £10 5s to £10 10s. The f.a.q. standard of New South Wales wheat for the 1907-8 season was last week fixed by the grain section of the Sydney Chamber of Commerce at 62J!b per imperial bushel. Last season the standar3 was 66£lb, in 1905-6 621b, and in 1940-5 59Ub, the lowest on lecoid. I At the close of last week the London rates for two Australian wheat cargoes were 40s 6d and 39s 6d the lowest price quoted this yearThe former rate was obtained for the consignment by the Leicester Castle, which left South Australia on October 12. and the lower price was given for the cargo by the Melete, which left South Australia, on January 22. Private advices received on Tuesday stated? that the London cargo rate had fallen to _ 38s 9d. i The wheat markats in London and on the Continent of Europe (remarks the Town and Ccuntry Journal) have weakened on enormous shipments from the United States, andl on the prospect of large exports from the Argentine- Australian wheat cargoes are> down about Is a quarter in London. Wheat freights are quiet, but there are three South

Australian fixtures at 22s per ton. At the close of last week, milling samples of StemTredel, Purple Straw, Federation, and other approved varieties of New South "Wales wheat were offered freely in Sydney, but holders experienced a difficulty in sel ing, as Adelaide was ofieung primest South Australian in large quantities at a quotation equal to a Sydney landing co=t of about it Gd a, bushel. This did not tempt the Sydney trade, as the Sydney millers, having no export orders on hand for flour for Singapore, Hongkong, and Japan, are quite unable to pay any more than the Melbourne and Adelaide millers for •wheat. A foitnight ago there were more buyers than sellers in Sydney, but the position is now reversed to the extent that it is the buyers who demand concessions. Gradually the New South Wales wheat-growers are realising how risky it was for them to refuse the abnormally high -rate current in Sydney c few weeks ago «. rate which was characterised at the time as a " false price."

The grain section of the Sydney Chamber t>i Commerce has met for the purpose of •striking the standard of fair average quality ior the current cereal year in New South Wales; end fixed it at 62£lb to the imperial bushel, or Jib heavier than last year. The subject is not of material interest so far to New South Wales shippers, the small yield "Slaving checked oversea exportation for the time being. Some of the Sydney millers axe dissatisfied with the new standard, on the ground that it is too low, and that_ all the wheat they have purchased this season went considerably over this weight. As already mentioned, •some of the millers virtually established a dual wheat standard early in ihe season, one for pfimest wheat, and on-e for bleached grain, making a cash deduction peT bushel on the bleached grain, which takes a bigger quantity to make a ton of flour. A, dual standard is particularly desirable in the interests of those growers who lay themselves out for clean farming. The Californian system comprises- three grades, and works well. So far it would appear that the sale of the choice Brundali wheat on Temora account at equal to 4s 9Jd a bushel (Sydney) was in the nick of time, and that •the growers showed excellent judgment in Belling. Unfortunately, c number of irresponsible people some weeks ago indulged, in advice to the New South "WV«s farmers to told for a six-shilling market Through acting on this advice, a numbsr of wheatgrowers who refused 4s 8d to 4s 9Jd (Sydney) may yet have to quit at 4s to 4s 3d. The power of the world's wheat shortage tc send, up the world's prices was exaggerated in Europe and America, as well as in Australia; and one or two politicians, though knowing nothing about wheat, fathered the " falfae price" in Sydney by predicting that the world's shortage would send the Australian price to 6s this January. Pronouncements of this character do much mischief to the Sydney breadstuffs trade by unsettling the minds of the farmers, and by thwarting them from accepting good prices early in the season. Besides, when some city agents foretell big prices and advise the farmers to !hold while some newspaper writers advise the farmers to se,l, even the farmers are apt to think that these writers may be in league with the millers. The decline in the Melbourne market (reports the Australasian of February 1) continued until the latter half of last week, •when 4s 2id was reached. Tliis movement ■was the natural result of the falling-off m dema.'-a at the country stations, as the prices previoflfty ruling were altogether too high ior shippers, while the demand from town millers has been curtailed, as the excessively •high cost of wheat prevented them from accepting many orders for flour for export. After xecsnt exepriencea of the fluctuations of the Victorian market, it is only natural that shippers should adhere to the policy of chartering only for South Australia, where there is a large surplus; and some of the latest charters, in fact, have been of vessels in port at Melbourne, which will go round to South Australia to load. The lower leve. of prices has, however, led to more inquiry, UriieipaUy from millers ana „ J^f "become rather more active. Ihe mar net closes irregular at 4s 2£d to 4s 3Jd. There has been a fair amount of new •wheat offering in the local market during the week from Timaru and Oamaru districts, and the transactions recorded afford some indication of the market. In the Timaru district a number of lines amounting in all to some 10,000 eacks have been purchased at 4s 3d on trucks while «K>ther line of 2000 sacks was sold at 4s 3d delivered at a Timaru mill. In the Oamaru .^strict the sale of a line of between 2000 smd 300Q sackb of new wheat is reported at j. shade over 4s 4d on trucks, and m the Vshburton district 4s. 4d on trucks is indicated as the orice at which business would V-e possible. Local millers are only purchasing for immediate requirements, but the sale of a line of Taieri wheat is revorted at equivalent to 4s 6d delivered at mill door Dunedin. Sales of several small lines of old wheat have also been effected at up to 4s 8d on trucks northern stations. » Millers are hoping that as soon as deliveries become heavy it ntay be possible to secure wheat at 4s on trucks, as otherwise they will make an actual loss on the grist, lhe market, however, may now be said to have fairly opened at from 4s 3d to 4s 4<i on trucks, whether or no this price will be (maintained depends largely upon the course of the London market.

From the samples shown the new wheat appears to be of" Rood quality, although, in some instances, slightly pinched. If the present fine weather holds, it should all be well saved. The yields, however, are not expected to turn out quite so heavy ac was anticipated, and it thus becomes a moot question, whether in view of the decreased acreage there will be much more than sufficient for home requirements for seed and feed. . ... There is no fowl feed offering, and until Such time as the new grain is on the market orders are being filled with old muling *rheat, which is nominally worth from 4s lOd to 5s ex store. There is no change in the price of flour, and the downward tendency 1 of the Australian niarket renders it impossible for millers fco obtain any relief in a rise in the price of the local article. At the present price of wheat they are involved in an actual Joss on filling orders.' In the meantime ihe New Zealand Flourmillers' Association's quotation is unchanged — namely: — Sacks, £11 ss; 100's. £11 10s; 50's. £12; 25' s, £12 ss. The shipping price is £11 per ton, and the Invercargill price £11 10s. The local market is quite bare of pollard, fend stocks of bran are in exceedingly small compass. Quotations are unchanged — viz., Bran £+ 15s locally, and £4 10s for shipment, and pollard £5 10s both for local orders and for shipment. Such is .the Scarcity of offal all over the colony that taillers are being offered fully 5s per ton snore at free ports than the association's .tariff.

There M-'M firmer feeling in the oat knarket, consequent wpon the disinclination

of Southland agents and growers to quote for forward delivery. It is known that millers and merchants all over the colony are bare of stocks, and that some brisk buying must shortly be done. In Timaru and Oamaru the lowest: quotation for feed oats is now 2s 4d f.0.b., s.i., and speculators who have made contracts for MarchApril delivery at under that price have made haste to cover themselves. The ruling quotation in the countsy is 2s on truck's, and this applies alike to Canterbury, North Otago, and the Taieri. Sales of small lines of old oats are reported at 2s 3d ex store, and 2s 5d f.0.b., s.i. The price of oatmeal remains at £14 10s per ton. Our Temuka correspondent writes ac follows : —

The wheat market remains firm, but neither millers nor speculators seem keen to commit themselves to any large extent. During the last few days a few samples of new wheat are to hand, which 6how distinctly the effects of the dry season ; the quality is good, but slightly pinched, and the grains are on the small side. Farmers state yields are turning out disappointing. The yields are turning out from five to ten bushels below expectation, and in one case a crop was estimated to yield 50, and returned 30 of first*. The appearance and bulk of the straw is good, but the dry weather appears to have prevented grains at the too and bottom of the ears from maturing. The oat crops are fair on most places, on 6wa.mp lands good, but have suffered badly on the licrhter lands. The farmei-6 do not feel inclined to accept the lower rates now offering ; consequently little business is passing. The farmers in general are asking 2s 3d, country stations, while the merchants are offering 2s 3d f.o.b. for exnort; hence very little business is passing. Barley is offering in small lots, and from 46 to 4s 9d has been paid. Chaff is not yet on the market, and farmers do not feel inclined to cut into chaff at the nrice now offered. The potato crop, co far, shows no signs of blight, but the crop will undoubtedly be a light-yielding one ; the tops look well, but the tubers have not developed, and it will surprise many if the yield exceeds four or five tons to the acre, and hundreds of acres probably about three. Present values run as follow:— New wheat, 4s 2d to 4s 4d, country stations ; oats, 2s to 2s 2d ; barley (much depends on quality), 4s 6d to ss. There is little ryegrass offering, and no sheaf chaff or potatoes. Owing to a slackness in deliveries the potato market is a shade firmer. Peninsulas are selling at from 7s to 7s 6d, and northerns at 6s to 6s 6d per cwt. There is no change in the dairy produce, and quotations remain as follows: — Butter: Dairy pats and dairy bulk, 6|d to 8d ; separator pats, 7d to 8d ; separator bulk, 9d to 9£d ; milled — first grade S^d, second grade Bid ; firat grade factory prints. ll|d booked, ll^d cash; bulk, lid cash. Cheese: Factory mediums, 6d to 6id_; Akaroa loaf, s|d to 6d ; mediums, s£d to 6d. The price of eggs has again advanced, and the current quotation is Is 3d to Is 4d per dozen. Quotations for poultry are as follows: — Hens, 2s to 2s 9d per pair : roosters, 4s to ss ; goslings, 5s to 6s : ducklings, 5s 6d to 6s : ducks, 4s to 4s 3d ; turkeys, hens sd, gobblers 8d to 9d. Pigs continue exceedinslv scarce. Bacon pigs are quoted at 6d to 6id. Bacon is scarce at 9d, and hams of good quality are unprocurable. The market is fully supplied with chaff. New season's is quoted at £3 to £3 sa. The highest urice obtainable for prime old oaten sheaf is £4 per ton.

L 907 . . 1906 . . 1905 . . 1901 . . yrs 4.750,030 4,000.000 4.230,000 3,550.000 Qrs. IO.COOOOO 7.750.0C0 8,250.000 7,300,000 Qrs. 11,500.000 9,575,000 12,350,000 9,930.000