Wheat situation

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Title:
Wheat situation
Uniform Title:
Wheat situation (Washington, D.C.)
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v. : ; 26 cm.
Language:
English
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United States -- Dept. of Agriculture. -- Economics, Statistics, and Cooperatives Service
United States -- Dept. of Agriculture. -- Economics and Statistics Service
Publisher:
The Service
Place of Publication:
Washington, D.C.
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quarterly
regular

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Subjects / Keywords:
Wheat trade -- Statistics -- Periodicals   ( lcsh )
Wheat trade -- Statistics -- Periodicals -- United States   ( lcsh )
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federal government publication   ( marcgt )
statistics   ( marcgt )

Notes

Statement of Responsibility:
Economics, Statistics, and Cooperatives Service, U.S. Department of Agriculture.
Dates or Sequential Designation:
WS-1 (Nov. 1936) - WS-254 (Nov. 1980)
Issuing Body:
Issued, 1936- by the Bureau of Agricultural Economics; <Oct.-Dec. 1953>-Feb. 1961 by the Agricultural Marketing Service; Apr. 1961-Nov. 1977 by the Economic Research Service, U.S. Dept. of Agriculture; Feb. 1978- by the Economics, Statistics and Coopertives Servie, U.S. Dept. of Agriculture; <Nov. 1980-> by the Economics and Statistics Service, U.S. Dept. of Agriculture.
General Note:
Cover title.

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University of Florida
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Resource Identifier:
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oclc - 04015593
notis - ABY6688
lccn - 78643652 //r812
issn - 0364-2305
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lcc - HD9049.W3 U66a
ddc - 338.1/7/3110973
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U1IITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics
Washington
WS-21 ----------------------------------- July 23 1938.
THE WHEAT SITUAT I ON
Including Rye -


Suxnr'ary

Prospective world wheat supplies* for the year beginning July 1, 1938, are

now estimated at 4,850 million bushels or about 475 million bushels above those of

a year earlier and are the largest on record except for the 1930-33 period. The

1938-39 world production is now tentatively placed at about 4,200 million bushels,

which is 375 million bushels above that of last year. If present prospects mate-

rialize this will be an all time record. The largest previous world crop was in

1928, estimated at 3,996 million bushels.

Production in the Northern Hemisphere may be abcut 3,730 million bushels, or

about 350 million more than a year ago. Significant increases, compared with 1937,

are indicated for both Canada and the United States. European production is now

indicated to be almost 50 million bushels more than the 1937 crop. In the Southern

Hemisphere seeding is nearing completion and present indications point to a crop

larger than last year's in Argentina, but smaller in Australia. World carry-over

of old wheat on July 1 was probably around 650 million bushels, about 100 million

bushels above the world total of a year earlier.

Total world trade in wheat and flour may not be much different in 1938-39

from that of the past year, but on the basis of the present supply outlook it is

doubtful that imports of overseas wheat will be as large as in either of the past

2 seasons. Political and military consideration in Europa, however, might make for

some large purchases during the course of the -'ear, which -'culd raise the total.

The European exporting countries, namely the Danube Basin, Poland, also Turkey, all

promise to have significantly larger crops this year than last, and might supply as

All references to world and Northern Hemisphere supplies and production exclude
Soviet Russia and China unless otherwise stated.





WS-21 '


- 2 -


Continental
much as a third or more of the/European import requirements. Imports by non-

European countries in 1938-39 may not be much different from those of the year

just past.

Government activity in the European grain trade promises to play an in-

creasingly important rcle during this season. The restoration of import restrict-

ions and special trade negotiations in many importing countries is already under

way.

A United States wheat crop of 967 million bushels, the largest since 1915

and the second largest cn record, was indicated by July 1 conditions. A crop of

this size would be about 285 million -bushels in excess of the 10-year(1928-37)

average domestic disappearance of 683 mill ion bushels. The carry-over on July 1

this year is now estimated at about 180 million bushels, and with prospects for

exports in 1938-39 less favorable than in the crop year just ending, the carry-over

into July 1939 might exceed the record carry-over of 378 million bushels on July 1,

1933.
If there is. not much change in demand, the large wheat supply in prospect
will result in lower world prices than were received in 1937-38. With supplies in
the United States large, domestic prices are expected to continue below world
levels. World and domestic wheat prices now have largely adjusted to the new crop
basis, and changes in the next month or so will probably be affected chiefly by
changes in spring wheat conditions in the United States and Canada. The price ef-
fects of large wheat supplies may be offset to some extent by bouyancy reflected in
the speculative markets and in the general price level. While only a part of the
wheat supplies in excess of domestic utilization will come under the wheat loan,
it is nevertheless expected that the loan will serve as a check on further domestic
price declines.
A United States rye crop of about 51 million bushels was indicated by July 1
conditions. This represented about a 4 million-bushel reduction frcm indications
of a month earlier but was still about 2 million bushels above the 1937 crop and
about 15 million bushels larger than the 1927-36 average. In the important central
European producing countries the rye crop promises to be significantly above the
reduced harvests of 1936 and 1937 and overseas demand for United States rye this
year will accordingly be reduced. There has been little net decline in rye prices
since early June and it seems probable that further declines will be slight.

The August issue of this report the Summer
Outlook issue will contain facts of most signi-
ficance to wheat farmers in planning their seeding
programs.








WHEAT: WORLD SUPPLY AND PRICE. 1923 TO DATE*


SUPPLY I
(BUSHELS)
(MILLIONS)

4.800

4,600 --

4,400 -!

4.200 I-

4,000 -

3.800

3,600
1923-24


PRICE
p (CENTS PER
--Supply- BUSHEL)

120

110

-- 100

S/ 90

-- 80

- World price t 70

26-27 29-30 32-33 35-36 38-3960
'26-27 '29-30 '32-33 '3 5-36 '38-39


*YEAR BEGINNING JULY PRELIMINARY
'A AVERAGE BRITISH PARCELS DEFLATED BY STATIST INDEX (1910-14=100)


U. S. DEPARTMENT OF AGRICULTURE


NEG. 20691 C BUREAU OFAGRICULTURAL ECONOMICS


FIGURE I


WHEAT: SPREAD BETWEEN PRICE AT KANSAS CITY AND LIVERPOOL,
AND U.S. SUPPLIES FOR EXPORT AND CARRYOVER, 1923 TO DATE


CENTS PER
BUSHEL
20
LIVERPOOL
PARCELS
-20
-40
BUSHELS
(MILLIONS)

400

300

200

100

0


-I-


1923-24 '25-26


Carryover
Net exports
or imports


EXPORTS -


--i -'7


'27-28 '29-30 '31-32 '33-34 '35-36 '37-38
YEAR BEGINNING JULY


*CARRYOVER PLUS PRODUCTION LESS DOMESTIC UTILIZATION


U.S DEPARTMENT OF AGRICULTURE


FIGURE 2


NEG. 34440 BUREAU OF AGRICULTURAL ECONOMICS


WORLD WHEAT SUPPLIES FOR THE YEAR BEGINNING JULY I, 1938, ARE EXPECTED TO BE LARGER
AND WORLD PRICES LOWER THAN IN 1937-38. EXPORTABLE SUPPLIES IN THE UNITED STATES ALSO
ARE LARGE, AND DOMESTIC PRICES ARE EXPECTED TO CONTINUE BELOW WORLD LEVELS.


- U.S. SUPPLtES FOR EXPORT -
AND CARRYOVER*


IMPORTS .-
S I I I I I I


a.


PRELIMINARY


-- -- ... -


*J




WS-21


TIHE WCRLD WHEAT SITUATION

BACKGROUND.- Total world supplies of wheat, after increas-
ing from 1929 to 1933, declined sharply following successive
years of small production and increased world demand. The
apparent world disappearance has averaged about 3,770 million
bushels during the past 10 years. World prices of wheat moved
steadily upward from the spring of 1933 to the summer of 1937,
reflecting higher world commodity price levels, four success-
ive below-average harvests in North America, and the 1935-36
short Southern Hemisphere crop. In 1936-37 wheat prices ad-
vanced sharply as a result of increased demand and the smallest
supplies in recent years.

World wheat production* in 1937-38 is estimated at
3,827 million bushels, or about 290 million bushels larger
than in 1936-37. World stocks* about July 1, 1937, however,
were estimated at around 215 million bushels smaller than a
year earlier, resulting in total supplies in 1937-38 about 75
million bushels larger than the small supplies in the pre-
ceding year. Net exports from Soviet Russia in 1937-38 are
estimated at about 38 million bushels compared with 4 million
bushels in 1936-37. With somewhat larger supplies, uncertain
prospects for world business activity, and weakness in the
general price level, wheat prices declined generally during
the 1937-38 selling season.

Prospective world wheat crop largest on record

The 1938-39 world wheat production is now tentatively placed at about 4,200
million bushels, which is an all time record. The previous high-record crop was in
1928, when approximately 3,996 million bushels were produced. Table 1 shows the
Bureau's first tabulation by countries of estimated 1938-39 production 1/.

Canadian production 2/ is tentatively estimated by the Bureau at 360 million
bushels, on the basis of weather and yield studies. Spring wheat in Canada deteri-
orated slightly during June and was reported on June 30 as being 91 percent of the
long-time average, compared with 99 percent on May 31, and only 51 percent at the
end of June last year. Prospects also declined slightly during the first half of
July as the result of dry weather. While the condition of the spring wheat crop
on the whole is favorable, moisture deficiency is hampering normal crop development
in southern and central Manitoba, north central Saskatchewan and northern Alberta.
The Dominion Bureau of Statistics reports that wheat is heading over the southern
and central portion of the Prairie Provinces; stands are heavy, making good
moisture supplies essential for the proper filling of the heads. Traces of stem
rust have been reported in Saskatchewan and fairly heavy infections were found on
non-rust resistant varieties in Manitoba. Only slight hail damage has been noted
in Alberta and Saskatchewan but some serious damage was reported in southwestern

* Stocks, production, and disappearance for Soviet Russia and China are excluded
throughout this report.
1/ The 1938 harvest in the Northern Hemisphere and the late 1938 and early 1939
harvest in the Southern Hemisphere.
2/ See page 11 for discussion of crop prospects in the United States.


- 4 -






- 5 -


Manitoba. Grasshoppers are active in Manitoba and Saskatchewan. It is reported
that about 3 million acres of wheat in Saskatchewan are in danger from grasshopper
devastation. Heavy damage has already occurred over a large area.

In Europe favorable weather during late May and June resulted in a very
material increase in prospects. The crop is now estimated at almost 1,600 million
bushels, compared with the 1937 crop of 1,548 million bushels. During the latter
part of May and June abundant rains broke the extensive spring drought and caused
marked improvement, especially in the Scandinavian countries, western Europe and
Italy. The crop in Italy is now officially estimated at 257 million bushels,
which would indicate a remarkable recovery. This estimate, however, appears
rather large in view of an estimate in late June by the Paris office of the Bur-
eau of 220 millionbushels. Harvesting is generally expected to be somewhat de-
layed in most European countries as a result of the slow development of the crop
caused by the cool, backward spring. The largest indicated increases are noted
for France, Germany, Hungary and Rumania. Estimates of the French crop show wide
variations, ranging from 293 to 349 million bushels. This disparity is caused by
differing evaluations of crop improvement, following rains in May. The Paris
office of the Bureau estimates the crop at 301 million bushels, but states that
if favorable weather continues this may be revised upward. The estimates for
Italy and Spain show the greatest reductions compared.with .last year.

Soviet Russia will probably harvest a smaller crop than in 1937, according
to a report from the Berlin office of the Bureau. Officials of the Soviet Union
are said to have reported that spring wheat has been widely da.mag.ed by heat and
drought.

The crop in Northern Africa is indicated to be slightly less than that of
a year ago. The quality of the crop is considered to be fairly good.

Production in Asia, excluding China, is estimated at about 620 million
bushels, compared with the 1937 crop of 586 million bushels. Most of this in-
crease took place in India, where production is reported at 392 million bushels,
or 25 million more than the 1937 harvest.

In Argentina wheat sowing is nearing completion, weather has been favor-
able and the plants which have started growth are in excellent condition. The
continued low temperature has greatly benefited the crop. Heavy rains have pro-
vided excellent subsoil moisture reserves but there is some danger of this moist
condition stimulating the growth of weeds later. On the basis of weather condi-
tions to date and a moderate increase in acreage the crop is tentatively placed
at 250 million bushels compared with 185 million last season.

Growing conditions in Australia are fairly satisfactory in spite of de-
ficient subsoil moisture. Rains will be nee--d to maintain the present condition
as subsoil moisture reserves aro lacking in sonme parts of the country where no
really adequate rains have fallen for the past 8 or 9 L:,lWs.

The 1938 harvest in China is estimated to bo th- same as that of last
year and the quality of the crop is said to be slightly better.


WS-21





WS-21


Table 1.- Production of wheat in specified countries,
1935-36 to 1938-39


Country


: 1935-36 :


1936-37 : 1937-38 : 1938-39


NORTHERN HEldISPHERE
North America:
United States .........:
canada *.............
Mexico .... .......... :
Total (3) ........:


1,000
bushels

626,344
281,935
10,712
918,991


1,000
bushels

626,766
219,218
13,606
859,590


1,000
bushels


1,000
bushels


873,993 967,412
182,410 1/ 360,000
10,586 2/ 12,000
1,066,989 1, 339,412


Europe:
England and Wales .....: 60,592
Scotland .............. 4t480
Northern Ireland ......: 362
Ireland ...............: 6,686
Norway ................: 1,869
Sweden ..............: 23,610
Donmark ...............: 14,672
Netherlands ...........: 16,653
Belgium ...............: 16,101
France ......... ......: 234, 950
Spain .....1............: 157,986
Luxemburg .............: 1,022
Portugal ..............: 22,092
Italy .................: 282,760
Switzerland .........: 5,974
Germany ...............: 171,438
Austria ...............: 15,509
Czechoslovakia ........: 62,095
Greece ... ............: 27,130
Poland .... ............. 73,884
Lithuania .............: 10,093
Latvia ................: 6,520
Estonia...............: 2,267
Finland ...............: 4,233
Malta .................: 179
Albania ..............: 1,554
Total (26) ......: 1,274,811
Bulgaria .............. 47,925
Hungary 0...... ......: 84,224
Rucania ............: 96,439


Yu,~oslavia ....: 73.100


51,445 52,005 (
3,547 4,181 (3/ 59,700
273 164 (
7,839 6,990 / 7,900
2,094 2,497 3/ 2,400
21,635 25,720 3/ 23,900
11,266 13,522 3/ 12,500
15,428 12,959 1/ 14,700
16,153 15,550 16,167
254,618 253,537 4/ 301,300
121,492 4/132,000 / 102,900
1,071 1,206 1,213
8,651 14,540 16,534
224,570 287,000 5/ 257,203
4,470 6,081 6,210
162,660 164,120 3/ 176,400
14,039 14,470 3/ 15,400
55,583 51,266 / 57,000
19,537 32,373 1/ 27,600
78,357 70,774 3/ 79,000
8,027 8,109 3/ 7,900
5,272 6,302 ~/ 6,100
2,433 2,786 3/ 2,600
5,259 6,320 3/ 5,900
236 326 2/ 300
1,106 1,466 2/ 1,500
1,097,061 1,186,264 1,202,327
60,350 64,910 59,120
87,789 72,158 87,964
128,717 138,158 154,322
107.Zh22 86,253 86,300


Total (4) ....... : 301668 384278 361,479 387,706_
Total Europe(30).: 1,576,499 1,481,339 1.547,743 1,590,033


Continued -


1 f .


-6-





-7-


Table 1..- Production of wheat in specified countries,
1935-36 to 1938-39 Contrd.


Country


: 1935-36


: 1936-3


: 1,000 1,000
NORTHERN HEMISPHERE-Contd; bushels bushel
Africa:


37 : 1937-38 : 1938-39
*


1,000
is bushels


io60 000
bushels


Algeria .... ...........* :
Morocco ........ ..........
Tunisia ........... .... .
Egypt ..... ...... .. .
Total (4) ..........:
Asia:


Pal
Syr
Ind
Jai
Cho
Tur


33,532 29,774 33,209 30,864
20,036 12,234 20,895 26,051
16,902 8,083 17,637 14,213
43,222 45,700 45,378 2/ 42,000
S3,91 117,119 13(J12.8


estine ................. 3,834 2,795 4,682 2/ 4,000
ia and Lebanon ......... 18,520 15,704 17,210 2/ 18,000
.ia ..................... 363,216 351,680 366,539 392,075
an 48,718 45,192 50,410 6/ 50,279
sen ....................: 9,747 8,095 10,242 (10,000)
*key ..................: 92,641 141,582 136,483 7/147,000
Total (6) ...........: 536,676 565,048 585,566 621,354
Total 43 countries.... 3,15,858 3,001,768 3,317,417 3,663,927
Estimated Northern
Hemisphere total, ex-:
cluding Russia and :
China 225........ ...... 3,67225,000 3,067,000 3,383,000 32730,000


SOUTHERN HEMISPHERE
Argentina ...............: 141,462
Australia ...............: 144,218
Union of South Africa .......: 23,709
Estimated world total, :
excluding Russia and :
China ................: 3,601,000


249,193
151,390
16,077


3,540,000


184,801
186,918
10,157


3,826,000


1/ 250,000
4/ 150,000
_2/_. 11,000_


4#202,000


Compiled from official data except as otherwise noted.
1/ Based on weather conditions to date.
^/ Approximation.,
/ Estimate of the Berlin Office of the Bureau.
/ Estimate of the Paris Office of the Bureau.
[/ The Paris Office of the Bureau regards this official estimate as being
too high.
6/ Estimate of the Shanghai Office of the Bureau,
7/ Estimate of the Belgrade Office of the Bureau.


WS-21. "





WS-21


World wheat stocks about 100 million bushels larger thLan year ago

World stocks 3/ of old crop wheat on about July 1 are tentatively esti-
mated at 650 million bushels, which is about 100 million more than those a year
ago. This increase is almost entirely in the United States, Supplies for export
or carry-over in Canada, Argentina,'Australia, and United Kingdom port stocks and
stocks afloat (table 6) are only slightly larger than a year ago. Increases for
Australia and Argentina offset a decrease for CanadL. While it is too early to
have many reports from European countries, total Europtan stocks are expected to
be little different from last year. The carry-over in Germany now seems likely
to be well above a year ago, which about offsets very low stocks in a number of
important wheat countries, notably France, Italy and Spain.

With large supplies in prospect in surplus wheat producing countries and
relatively low prices, European stocks are expected to be considerably larger a
year from now. The carry-over this year and last may be regarded as the low
points in the carry-over series.

Overseas trade in wheat in 1938-39 now expected t'd be smaller '

On the basis of the present crop outlook 'and supply situation it now seems
doubtful that the imports of overseas wheat in 1938-39 will be as large as in
either. of the past 2 seasons (tables 7-10). Net imports into deficit European
countries for the year beginning July 1, 1937 are estimated'by the Bureau at 397
million bushels compared with 435 million bushels a year earlier. Political and
military conditions in Europe, however, might make fcr somr abno-mal purchases
during the current year (beginning July 1), which wculd raise thj total. While
Italy is a prospective large importer compared with this past season, only a
moderate quantity seems likely to be supplied by overseas countries, unless ob-
tained under very favorable conditions. Also, Germany which imported large
quantities in 1937-38 will need very little foreign wheat for consumption, outside
of takings for Austria. A virtual cessation.of French imports, except small
quantities froi North Africa, is likewise indicated.

The European exporting countries, namely the Danube Basin, Poland, and
Turkey, all promise to have significaniu; -r.- crops than last year, and might
supply as much as a third or more of t/ e-.c., : n irpmort rn'uiremerts. Should
Soviet Russia, howmev-r, be. a less active exporter than in the past year, it would
tend to cffzt the effect of the larger 'urcpean vrplu:. supplies. Table 11
shows exports from So.viet Russia annually for 1937-634 to 1936-37 and for 10
months in 1937-38.

Imports by non-Eurcp.ean countries in 1938-39 may be not much different
from those in 1937-38. Of the countries mr ing up this list, the- year-to-year
variations in imports are largely by the Oriental courtr'es. Tt is -xpected
that depressed economic conditions and foreign exchange difficulties in these
countries will restrict imports in spite of small -h.rat crops. Practically no
non-Oriental wheat was imported into China during 1.37-38 mid prospects for
imports into that country in the now marketing year are not bright. Total

A table showing world supply and disappearance, which includes carry-over
stocks 1922 to 1937, was published in "Thc Wheat Situation", June 1938, page 14.


- 8 -





WS-.21


- 9 -


imports of flour into China this season,. estimated at something over 2 million
barrels, will besupplied very largely by Japan and Manchuria, with only limited
quantities probable from the United States, Canada and Australia into South
China 4/. In 1936-37 a total of only 280,000 barrels of flour was imported
into China.

Japan, after having been a net importer for several decades, in 1937-38
became a net exporter of wheat, including flour in terms of grain. Total wheat
and flour imports into Japan, in terms of grain, are not expected to exceed
4,850,000 bushels compared with a total of 7,789,000 bushels in 1936-37. Ex-
ports of flour, however, resulting largely from heavy shipments to North China,
may total as much as 2,600,000 barrels compared with 985,000 barrels in 1936-37.
Flour exports from July 1, 1937, through April 1938, amounted to 2,359,000
barrels.

Until the Canadian crop moves to market the United States will have to
compete for the United Kingdom market primarily with the Danube Basin countries.
Moreover, in view of the present supply situation in Europe and North America,
also early acreage and weather reports from the Southern Hemisphere, it would
not be surprising if several countries held off active buying until winter or
next spring, using up domestic-new crop supplies while awaiting further market
declines.

European Government control measures increasingly important

-. Government activity in the European wheat and grain trade promises to
play an increasingly important role during the coming months. This is due not
only to the new crop measures and special trade deals, but especially to the
recent marked decline in world wheat price levels. The restoration of import
restrictions and special trade negotiations in many importing countries is
already under way. Holland is reported to have recently increased the duty on
all grains, and Belgium has re-established the license fee. In Denmark, the
sliding scale duty is coming into effect again. Special trade negotiations have
been actively going on in recent weeks and more are likely. Germany has been
particularly active along this line, in view of the inclusion of Austria in the
Germany control system. It is reasonable to expect that practically all of
Austria's former overseas takings will be replaced by European wheat.

Another form of Government activity which may become significant is the
creation of "emergency stocks" in many countries. This is not a new question,
but the higher level of prices prevented much action along this line until re-
cently. Germany has already made some sizable imports which have enabled the
replenishment of stocks, and further accumulations may be made if barter trade
arrangements prove favorable. England also has purchased quantities of wheat
for stocks, and Holland is considering somewhat similar steps. The French
Government, likewise, is reviewing plans for the disposal of the surplus which
now seems apparent from the new crop, and one probable move is the building up.
of reserve stocks.

Admixing, especially of corn and potato flour to wheat or rye flour,
continues to receive much attention in ii ,orting countries. In Norway, a

4/ Reported by the Shanghai office of the Bureau of Agricultural Economics.





WS-21


- 10 -


special agricultural committee has recently recommended that the Grain Monopoly
carry out experiments regarding the admixture of potato flour. In Czechoslovakia
the Defence Ministry is reported to be considering the approval of a 10 percent
potato flour admixture in flour for army purposes. In Italy the 20 percent ad-
mixture decreed in May, however, appears to have proved quite unpopular and
unsatisfactory, and has now been reduced to 10 percent. In Germany, some re-
laxation cf the admixture requirements is conceivable, during the coming year,
especially for rye, if good crops are harvested. In France numerous measures
are being considered for the increased utilization of wheat, i.e., the denatur-
ing of certain quantities for feed and the distillation of wheat for alcohol.

Foreign prices decline with prospects of large crop 5/

Wheat markets have been dominated by prospects of the large new-crop and,
where not fixed, prices have tended downward since the middle of June. On con-
trolled markets the setting of the new crop prices is new under consideration.

Table 2.- Prices of imported wheat at
Liverpool


: Hard wheats Soft wheats -
Date : U.S. : :Canada : : U.S. : Austra-: India
(Friday) (Gulf) : Argen-: No.3 :Russian:(Pacific): lian : choice
:No.l Dk. : tine :Manitoba: : White : 1/ :Karachi
:Hd.Winter:Barusso: / : : /


Cents Cents Cents Cents Cents Cents Cents
1938 :
June 3: 102.0 97.8 118.2 --- 83.8 92.0 88.5
10: 107.7 99.1 117.7 99.9 90.6 96.0 90.6
17: 111.1 104.1 119.7 --- 96.3 101.0 92.5
24: 108.5 104.3 121.7 104.7 90.7 99.2 91.9
July 1: 106.1 103.4 115.4 99.8 89.8 99.9 92.1
8: 2/88.8 100.7 108.4 92.6 87.2 98.0 91.1
15: 90.2 99.4 110.2 87.9 86.3 97.1 94.0


SEmpire wheat qualifying for Imperial Preference is exempt from
duty (approximating 6 cents per bushel) under Cttawa Agreenents of
November 1932. 2/No. 2 Hard Winter.


Table 2 shows prices of imported wheat in Liverpool. Since mid-June the
price of United States wheat.has declined further than the price of other wheats
chiefly as the result of large carry-over and new crop wheat supplies in the
United States compared with relatively sm-.ll supplies and reduced selling pres-
sure by other countries. :Table 4 shows average closing prices, and their de-
cline since the middle of June, in Winnipeg, Liverpool, Buenos Aires compared
with prices in Chicago, Kansas City and Minneapolis.


5/ Domestic wheat prices discussed on page 13 .





WS- 21


- 11 -


U:- wheat markets where prices are controlled, downward adjustments
seem likely in some cases, but in general it .appc-as that another period of
low world whe:t prices will stimulate full protection of the local markets.
In the -European exporting countries duel price systems are probable if
world prices drop to much lower levels.

A minimum wheat price for C duiFd for the year bo4ginning August 1 is
expected to be aniounc..A by tie Canadian .-.,t Board or. atout July 27.
Indications are that the Boar-d willl establish the minimum price below the
current market and below corresponding loo!, levels in the United States. In
addition to the payin'-nt f-.rmrc.'s are expected to receive participa-ir- certi-
ficates cntitlin:- thom to -sha.e in .,ny profits that mij result should the
who:t b:.- disposedd of at pricco above thei fixed minimum.

TEE 023rO3?IC ',;. ? CITJ.TION

B:KCiROU.0D'.- The carry-o-er of vt hct in the United StateE
for the 5 years 1924-2J, avorageu. about 115 million bushels.
Sto ks which be-:-.;n to ccumulato in 1929 reache(- the record
peak of 378 million bushels in 19235. Four srall wheat crops,
however, reduced stocks to _bout 100 million bushels by
July 1, 1937. Domestic disappc.rcace durin.- the 1C yoars
1928-37 avc.ragod 683 million bu,3hols,

EDonmestic wheat prices from the spring' of 1953 to that of
193" were unusually high relativc to ;ocrid imrtt prices, bo-
cause of four smll domestic crops c-used largely by abnormc.lly
loT! yields per acre. During 19"6-37 both world rnd domestic
prices dv nced sharply as a. rocult of incroasoc demand and
the Emn.llest supplies in recent ye-ars.

E-rly in the 1937-39 season, domestic and foreign wheat
prices rose sharply folloviing reports of serious udrnoe to
the CLnadcdn crop end tho threat of rust d :;e in the United
St- t2s. It vas thoudrLt possible at that til. ,, th orlcd prices
miriht reirrin sufficiently '-bovc the 19356-37 levIc to offoct the
decline in United St-'-tes prices to on export basis. how'evcr,
with an incro.;se of o .:'r 100 million bushels in the ostm-"..te of
the world crop, prosprcts of lrrgo ship.,ents f:om Soviet Ru' sia,
a slow Europcan dc:'-n. disturbed business conditions, r-nd a
felling gcnor-l co:.-j:otity prico level, whoc.t prices in world
r-i rkets declin,'d.

Second 1-rgost Uniter pt,:tes .,,en,.t crop in prospect

United States :.hoat crop of 907 million bushels, the largest since
1915 -.d second lr.ri7'st on record, wrs iidicated by July 1 conditions. This
repr,-.soets a reduction of .-bout 45 million bushels from the estimot%- of a
month o"rlier. Table 5 chors production -nd -.cr o .. of -:hoat for the 10-year
a.or-G., 1937 rnd 1938, Production by clGasos v:s indicated as follows in





-7-21 12 -
million bushels, with the 10-year (1927-36) average_ in parenthesis: hard
red winter 412(313), soft red winter' 242(182), hard red spring 176(129),
durum 35(42), and winter and spring white 102(86).

During Junn winter wheat prospects declined in bhe Great Plains area
where wheat threshed out below earlier expectations. Ir-licated yields per
acre wer, also sharply below those of a Wonth earlier in Iowa, Oregon and
California. 7ast of the Mississippi prospects in general impro 7ed sliF.htly.
In North and South Dakota semi-drought conditions during most of June
lowered spring tvheo-t prospects materially in areas .7hich started the rcp
season with deficient subsoil moisture, Benefits from late Juno rains in
those areas was more than offset by insect end grasshopper damage and by
probable rust loss, An early spring in Minnesota permitted largc seedings,
and gro-ving conditions have boon generally feor-bl '. Prospects in Montana
on July 1 were vell above average, and in other TJostern States they were
average or bettor. Prospects in. Uorth Dakota---a~ important durum producing
State---declined materially during Juno with yields indicated to be slightly
below average.

Table 3.- Acreage and production of wheat, Unit-a States,
10-year average, 1937 and 1938

Acr-eaCe harvested :
Kind of : or to be harveted : Production
whe-t :A'orage : 1937 1938 :Airrage : 1937 :Indicated
:1927-36 : : :1927-36 : : 1938
: million : mi'I.lion million Million millionn D.illi-on-
acres actes ccros bushels b'ishols bushels

,inter Thert ......: 37.3 46.9 49.9 546.4 685.1 715.4
Durum l/....... .: 6 2.8 3.5 40.1 .7.8 .3.4
Other spring ......: 14.4 14.8 1.7.7 1C6.4 161.1 218.6
Total ......: 55.3 64.5 71.1 752.9 374.0 967.4

ll Kinnesota, North DJkota and South Dakota.

Since July 1, temperature in the spring wiheot area ',.s been 7.ner-lly
above normal with pro,-ipitation more than trics norm.rl in ec stern I.-ntana
and western North Dakota, considerably abovo normal in. :csL~rn Montana,
western South Dakota and eastern !Torth Dakota, only sli._-htly -bovo norml-i
in southern linnesota end belo-; normal in eastern South Da-kota -and northern
Mi nne, sota.

In its report on June 22, the Bureau of E:tomology and Plant
Quarantine started that stem rust of w-heat developed v.ry rpridly during the
past wedc on Ceres and Marquis wheats in North Dakota -nd northeastern
Montana. Heavy initial infection apparently took rlace in this area during
late Juno end early July and rust is now epidemic on those vw.rieties but as
yet the extent of the damage cannot be determined. Rust still is rol-tioely
light on most dui.rum3. A conspicuous feature of rust ,cvoloprmnt this ycrr






WS- 21


- 13 -


is that the epidemic extended northward and westward from the hard red
winter area but not northeastward as in 1937. The total damage for South
Dakota will not be great and losses from stem rust in Minnesota will be
relatively slight, but there will be serious loss in many fields of 1Marquis
and Cares in 1Torth Dakota and eastern Montana. Thatcher, which is planted
extensively in Minnesota and the eastern Dakotas, is maturing relatively
free from stem rust.

Grasshoppers are reported to have caused considerable dama:-e to
spring wheat in eastern ard southeastern North Dukota, northern and eastern
South Dakota and eastern Montana.

U. S. stocks of old wheat tentatively estimated at 180 million bushels

On June 15 stocks of old wheat in the United States were tentatively
estimated at 180 million bushels, 20 million bushels less than the September
1937 estimate of the Bureau. The total includes stocks on frms, in country
elevators and mills, in cities (commercial stocks), and in merchant mills
and elevators. Stocks of old wheat on farms July 1, were estimated at 59
million bushels and in-cities at 22 million bushels and in country elevators
at 32 million bushels,. making a total for these throe items of 113 million
bushels, compared with 91 million in 1937. Estimates of stocks in merchant
mills -nd elovators will not be available until late this month, and will
be published in the August issue of "The iWhoat Situation". Probable total
annual disappearance and April-June disappearance indicate that the merchant
mill and elevator stocks may total about 65 million bushels.

Tot-i United States expo:-ts of wheat and flour in terms of wheat for
the July-June 1937-38 yeor are now estimated at 100 million bushels, 5 million
more than the estimate made by the Bureau in September 1937. Assumiing the
estimates of c-rry-over and exports to be correct, the supply rnd distribu-
tion for 1937-38 wrls <-bout as follows: Stocks of old whoct on July 1, 1937,
at 91 million bushels and production at 874 million bushels, making total
supplies (aside from imports for domestic use of less thnn 1 million) of
965 million bushels. This is accounted for by exports of 100 million bushels,
Juno 30, 1938, stocks of 180 million buishcls and apparent domestic disappear-
.nco of 685 million bushels.

Domestic what prices decline with heo-.y new crop mr.,o'emont

;.ftLr advrncingr the first half of Juno, influenced by early thrashing
returns showing the result of frost injury to -*int:,r ;,hcat -,nd by concern
over black stem rust, domestic wheat prico.s declined during late Juno :.nd
early July (tables 4 and 5). 2usides the prospects for the best Northern
Hemisphicru crop in recent years, including fa-'cr-ble prospects for spring
wheat in both Cnd ra r-d- the United StateSs, heavy marketings of neow winter
v:h-:ot have taken place, foar of rust dc mno has bc-n less pronounced and
dem-,nd in both domestic and foreign mnrkIzts has boon slow.





- 14 -


Domestic prices have now larEely adjusted to the ne.:- crop basis, and
changes in the next month or so probably will be affected chiefly by changes
in sprin- heat conditions in the United States and Canada. The price
effects of large wheat supplies may be offset to some extent by bouyancy
reflected in the speculative markets or in the general price le.el. The
wheat loan program offering cooperating wheat producers loans at farm rates
averaging between 59 and 60 cents a bushel was officially announced by the
Secretary of Agriculture on July 14. The loan rate, made under provisions
of the Agricultural Adjustment Act of 1938, is approximately 52 percent of
the present farm parity price of 1l.14 per bushel. 6/ While only a part of
the who'~t supplies in excess of domestic utilization w-ill come under the
-heat loan, it is expected nevertheless, that the loan vill serve as a check
on further domestic price declines.

67 Parity price obtained by multiplyin,- the August 1909-july 1914 average
farm price of -'hoat by the June 15, 1938 index of prices p-id, plus interest
and taxes payable by farmers and divided by 100. (88.4 x 129 100 = 1.14)




Table 4.- A-.'rage closing prices of Scptcmber 1, wheat futures,
specified markets 2nd dates, 1937 and 1938

: 'innipeg : Liverpool : Buenos : : Kansas : Minnoap-
Date : 2/ 2/ : Aires : Chicago : City : olis
1937: 1938: 1937: 1938: 1937: 1938: 1937: 1938: 1937: 1938: 1937:1938
:Conts Cents Cunts Cents Cents Cents Cents Cents Cents Cents Cents Cents
Month- :


Apr. :121.3
May :119.5
June :117.3
Teek
ended
June 4:112.4
11:110.7
18:114.8
25:122.0
July 2:134.4
9:138.1
16:142.9

High 4/:142.9
Low 4/:110.7


88.9 132.4 98.0
84.0 130.3 92.3
82.9 125.2 86.6


76.9 123.6 81.5 ---
80.1 120.2 84.4 ---
85.3 123.4 88.6 3/110.1
85.8 127.8 87.7 3,114.4
83.8 138.6 88.1 5/124.5
78.8 140.6 84.6 3/122.6
78.4 144.1 84.8 124.3

90.0 144.1 99.3 5/124.5
78.4 120.2 84.6 5/110.1


--- --- 119.3
--- --- 116.7
--- --- 111.5


--- 109.8
--- 108.2
--- 108.8
82.9 114.4
82.7 123.4
80.8 124.6
78.8 126.1

82.9 126.1
78.8 108.2


81.6 115.5
77.1 I1i.4
76.5 108.4


71.0
75.4
50.0
77.7
76.0
72.6
72.2


106. 7
105. 1
105.4
111.4
119.2
120.0
122.1


82.9 122.1
72.2 105.4


77.6 125.0
73.3 121.4
72.4 120.3


67.4 115.7
72.0 114.3
76.1 117.6
72.7 126.4
70.6 135.8
67.1 139.6
67.0 141.6


87.1
80.:;
82.6


75.9
80.3
88.6
85.2
81.6
77.8
77.8


79.0 141.6 88.6
67.0 114.3 77.8


/ October futures for Winnipeg and Liv'.rpcol
2/ Conversions at noon buying rate of exchan-,u. 3/ August futures.
/ April 9 to July 16, 1938, and corresponding dates for 1937; Buenos Aires
for dates shown.
5/ August anid September futures.


WS-21




WS-21


- 15 -


Table 5.-Weighted average ccsh price of wheat, specified markets and
duteu, 1937 and 1938

:All classes: No. 2 : No. 1 :No.2 Hard : No. 2 : Western
:and grades :Hard Winter:Dk.N.Spring:Amber Durumn:Red Wintnr : White
Date :six markets:Kansas City:Minneapolis:Mir.neapolis: St. Louis :Seattle 1/
: 1937: 1938: 1937: 1938: 1937: 1 38: 1937: 1938: 1937: 1938: 1937: 1938
:Cents Cents Cents Cents Crnts COnts C:nts Cents Cents Cents Cents Cents
Month- :
Apr. :140.8 86.2 140.0 84.6 160.0 110.5 172.0 100.0 141.6 -85.0 119.5 81.4
May :131.5 82.0 132.0 79.7 146.3 105.3 12P.4 8 .4 131.9 76.9 115.8 77.0
June :123.0 81.3 120.8 ?6.7 145.0 105.0 122.4 90.0 122.3 741.8 112.5 73.7
Crop yr.:
ended :
June :121.2 106.3 121.4 110.8 146.9 127.9 156.9 106.9 111.1 112.6 107.7 88.2
Week
ended-
June 4 :123.7 74.6 127.2 69.7 139.4 94.8 117.2 75.4 125.0 69.6 110.0 69.2
11 :123.3 83.9 123.4 77.8 136.3 101.9 109.9 7. 8 12..1 72.8 109.6 71.0
18 :123.9 91.1 123.5 86.7 144.0 115.8 109.0 97.7 123.5 93.0 112.0 77.4
25 :124.5 83.1 119.6 77.4 152.2 105.6 131.6 92.3 119.9 79.6 J14.8 76.3
July 2 :122.4 73.3 121.3 72.9 151.9 105.1 148.1 83.9 122.1 70.7 1.16.6 72.6
9 :121.9 69.6 122.2 69.4 156.2 97.0 14.2.0 33.4 124.5 69.1 113.8 69.2
16 :123.0 69.6 125.3 71.1 152.0 97.6 133.2 d3.3 124.1 69.0 111.8 ---


High 2/ :145.5 91.1 144.5 86.7 169.8 llb.3 16%.2 101.4 144.7 3b.7 122.0 82.2
Low 27 :121.9 C9.6 119.6 69.4 136.3 94.3 109.0 75.1 119.8 69.0 109.6 68.2

I/ Weekly average of daily cash quotations, basis No. 1 sacl-cd.
/ April 9 to July 16, 1938 and corresponding dates, for 1937.


Table 6.-V.eat surplus for export or carry-ovor in chree exporting
countries, United Kingdom port stock-: and rtocks afloat, July 1,
1935-58 1/


Position 1935 1956 1937 1938
: Mil.bu. Mtil.bu. .il.b'i. 1Mil.bu.
Canada:
In Canada .........: 215 145 42 33
In United States ..: 9 15 6 1
Argentina ...........: 68 34 22 36
Australia ...........: 54 37 33 56
Tot al .............: 346 231 10,3 106
United Kingdom port :
st ocks ...........: 10 10 10 12
Stocks afloat to:
United Kingdom ....: 11 14 12 13
Continent .........: 10 9 12 11
Orders ............: 6 5 10 12
Total ........... z: 3? 41 48
Grand total .....: 583 268 147 154
1/ For oth',r than the United States: Carry-over at the b-ginning of
the year (Canada, July 31; Argentina, January 1; Aurtrali-, Dec-mber 1
of the previous year) plus production, minus domestic utilization for
the year, minus monthly exports to date,





- 16 -


Table 7.- Movement of wheat, includinG flour, front principal
exporting countries, 1934-35 to 1937-38

SExpots as aivn by -)fficial sore .:
Country TDtalt July 1 to date shown : Date
..:19.4-3. : 193Tb 19 .L--7 : D1a,5te'- 37:1937-_8:


: 1,000


United States 1J....: 21,532
Canada .............:169,630
Argentina .......... :117,000
Australia ..........:10U,007
Russia ..... .......: 4,2S6
Hungary ............: 12,499
Y-agoslavia .........: 4,4ol
Rumania .......... .: 3,432
Bulgaria ...........: 375
British India ......: 2,313


'
Total .. :513 450


1,000
Whcis

15,929
237, 447
76,577
102, ^58
29,704
14,644
728
6,391
92 8
2.556


i<7 273


1,000


21,584
213,028
162,085
95,970
4,479
27,42S
17,%02
35,5o0
7,273
14,674


gooQ 7._13


1,000 1,000 1,000
ihh2l s bushels bushels


14.547
209,747
76.577
96,g 44
28., 816
11,943
156
9,996
954
1,599


19.368
199,093
162, 08
85, 964
3,729
26,658
14,269
31,.330
5,859
9,013


95,738.
85,922
69,670
111,798
39,760
8,917
4,90o4
31,060
7,10o4
10,342


May 31
Maey 31
Jne 30
MaW 31
Apr. 30
May. 31
Apr.30
Apr.30
Apr.30
Feb. 28


- -- I ,.I.- .d. J --J
:. Shipments as given by trade sources
:Totl : 7ook andoc. (1, 3)_ _____
:'156--7 1937-31 : June 25 : July 2 : July 9 : July _6


:1,000

North America 2/....:231,832
Canada, 4 markets 3/:194,531
United States 4/....: 10,395
Argentina ..........:164,678
Australia ..........:105,836
Russia ........... ..: 88
Danube & Bulgaria 5/: 65,544
British India ...... :--.674
Total 1/....... :502.692
Total European ship-:
ments 2/ .........:4 34,670


Total ex-European :
shipments 2/......:127,192


19,0'.0
bushels

184,720
86,595
83,651
66,g98
128,18g4
42,24g8
37,320
1r-714


1,000
bushels


2,096
510
1,366
956
2,54o
280
208
64o


1,000
bushels


2,64o
46o
1,383
1,596
3,o4s
723
.848
1-200


1,000
bushels

3,809
467
1,686
2,688g
3.257
g24
344
992


1,000
Lushels


2,96
1,2n

1,502
1,126
592
264
440


479,0 S4


397,656


99,400


5,224


1,76S


I/ Includes flour milled in bond from foreign wheat.
2 Broonhall's Corn Trade News.
_/ Fort Williajm, Port Arthur, Vancouver, Prince Rupert, and New Westminster.
O/ official reports received frmm 16 principal ports only .....
SBlack Sea shipments only.
SOfficial.
17 Total of trade figures includes Ndrth America as reported .by Broomhall's but
does not include items 2 and 3-


( R-< .....


m


. .





WS-21


- 17 -


Table 8.-Exports of wheat and whea flour from the United States,


1936-37 and 1937-38
(Includes flour milled in bond.from..foreign


wheat).. .


Period Vheat Wheat flour :Wheat incl. flour
Period: 1936-37 : 1937-38 : 1936-37 : 1937-38 : 1936-37 : 1937-38
: 1,000 1,000 1,CO 1,000 1,000 1,000
: bushels bushels barrels barrels bushels bushels

July-May .......: 2,398 74,205 3,611 4,581 19,368 95,738
Week ended- i/ :
June 4 ......: 81 1,321 35 32 245 1,471
11 ......: 512 1,271 39 66 695 1,581
18 ......: 15 "07 24 62 128 998
25 ......: 220 1,234 33 28 375 1,366
July 2 ......: 271 -1,129 22 54 374 1,383
9 ......: 51 1,432 39 50 234 1,667
16 ......: 80 1,114 18 64 245 1,415


Compiled from reports of the Department of Commnerce.
from the United States by weeks are not available.
of exports t-hrough 16 of the principal ports.


1/ Data for total exports
These data are the total
2/- Preliminary.


Table 9.-Shipments of wheat, including flour from principal exporting
countries, specified dates, 1936-37 and 1937-38

: Argentina : Australia : Danube : Horth America
Period :1936-37:1937-38:19356-37:1937-38:1936-37:1957-58:1936-37:1937-38
: 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
:bushels bushels bushels bushels bushels bushels bushels bushels

July-May ...:157,322 59,662 93,604 114,756 61,992 35,776 213,488 167,152
Week ended- :


June 4
11
18
25
July 2
9
16


,....:
....:
....:
,...:
....:.
....:
*.. : f
,.,:*


2,720
1,180
1,556
816
1,084
1,412
672


1,424
1,088
2,172
956
1,596
2,688
1,502


5,800
2,284
2,108
1,872
2,168
2,052
1,124


2,036
4,768
1,436
2,540
3,048
3,267
1,126


904
968
50.1
376
800
808
120


176
24
288
208
348
344
264


3,016
4,080
4, 304
2,920
4,024
1,440
2,488


3,904
5,312
3,616
2,096
2,640
3,809
2,965


Compiled from Broomhall's Corn Trade News.




- 18 -


Table 10.- Net imports of wheat, including flour, into European countries,
year beginning July 1, 1936-37 and 1937-38
: a Net imports reported
Country : 1936-37 : 1937-38 : July 1 : :
1936-37 1937-38
: : forecast: t6 : :
Mil.bu. Mil.bu.: : Mil.bu. Mil.bu.

Austria ................: 10 7 : Apr. 30 : 8 6
Belgium ................: 40 38 : May 31 : 36 34
Czechoslovakia .........: / -11 1/- 1: May 31 : 9 / 2
Denmark ...............: 7 7 : Apr. 30 : 6 5
Finland ................: 4 3 : May 31 : 3 2
France .................: 7 15 : May 31 : 7 14
Germany *...............: 23 48 : May 31 : 12 45
Greece .................: 21 13 : Feb. 28 : 13 10
Ireland ................: 14 14 : May 31 : 13 13
Italy ..................: 54 7 : May 31 : 45 5
Latvia .................: 1 1 : Apr. 30 :1 1
Netherlands ...........: 21 24 : May 31 20 22
Norway .................s 9 7 : May 31 8 6
Poland ...,,............: 1/ 6 0 : May 31 : I 6 2/
Portugal ..............: 1 : Mar.31 a 3/
Sweden .................: // -1 : May 31 : -1
Switzerland ............: 19 14 : May 31 : T7 13
United Kingdom .........: 199 195 : May 31 : 183 172
Total imports of above: 429 394 :

Spain .. ... ....... ...: 6 3 : :
Total imports ........: 435 397 : : 372 348
Total exports ........: 17 2 : : 15 3
Total net imports ....: 418 395 : 357 345
Compiled from official sources except as otherwise stated.
1/ Net exports. 2/ Net Exports of less than 500,000 bushels.
W/ Less than 500,000 bushels.


Table 11,-Soviet Union: Wheat exports, 1933-34 to 1937-38

Year beginning: All : South Russian
July 1 : fronties ports
Million bushels Million bushels

1933-34 : 33.8 26.7
1934-35 : 4.3 1.7
1935-36 : 29.7 29.0
1936-37 4.5 0.1
1937-38 2/: 39.8 42.2

1/ Including flour.
2/ July-April, only.


WS-21






WS-21


THE RYE SITUATION

BACKGROUWD.- During the past 10 years rye acreage has
remained above the pre-war level, but has been below
the high level reached at the close of the War. The
increase in rye production during the War period was
due largely to an expansion of rye acreage into the
sub-humid area of the spring heatt Belt. Since 1924
yields have been generally below the average for the
years 1910-15 and acreage abandonment somewhat larger.
In 1933, 1934, and 1936 droughts greatly reduced rye
yields, caused heavy abandonment and reduced supplies
below domestic requirements. T7ith more favorable
growing seasons in 1935 and 1937 yields and production
were much above the 10-year average.


Rye crop estimate about unchanged

Growing conditions for rye were somewhat less favorable during June
than earlier in the season and the prospective United States crop was
reduced about 4 million bushels during the month. July 1 conditions
indicated a crop of about 51,300,000 bushels, still about 2 million bushels
above the 1937 crop, and about 15 million bushels larger than the 1927-36
average production. A crop of this size, together with farm and
commercial stocks of about 9,700,000 bushels would result in a total supply
of around 61 million bushels which compares with 55 million bushels last
year, 48 million bushels in 1936 and 70 million bushels in 1935.

On July 1 the acreage for harvest was estimated to be 3,914,000
acres which compares with 3.,839,000 acres last year and the 10-year
average of 3,140,000 acres. Increased acreage in the past 2 years has
boon accompanied by higher yields. The indicated yield for 1938 is
about in line with those for the period 1900 to 1915, and much higher than
the 1925-34 average yield. Indicated yields wore much above average in
North Dakota, South Dakota, Minnesota, Wisconsin, and Nebraska, where
the bulk of the rye crop is produced. Yields somewhat above average wore
also indicated for most of the other States in the Middle Vest, while
bolov:-avorage yields were indicated only for a few of the Southeastern
Statcs whore rye production is of minor importance.

The present prospective supply of rye will provide a liberal
allov:ancc for feeding in addition to domestic milling needs. On the other
hand, the demand for rye from feeders will be reduced this year as compared
with a year ago since supplies of feed grains are now much larger relative
to the number of livestock on farms. In 1935-36 about 50 million bushels
of rye were used domestically, in 1936-37 about 44 million bushels, and
in 1937-38 about 40 million bushels.


-19-





3 1262 08861 8342
V7S-21 -20- ..



Ryo export outlook less favorable th-n last season


The rye crop in Europe pro.:.ises to be significantly above the
small harvests of 1936 and 1937, according to a report from the Berlin
Office of the Bureau. The condition of the crop improved, during the
past months in Germany, Poland, and Czechoslovakia. These throe countries !I
last year produced more than 65 percent of thet total European production.
With increased production in important European countries and control i
and restriction measures in force ( pago 9 ) demand for overseas rye
will be reduced.


Domestic rye prices show little not decline

The average price of No. 2 Rye at Minneapolis was 53.8 cents per
bushel for the wook ended. July 16 or about 30 cents per bushel below
the average price for July last year. Ryo prices advanced about 7
cents per bushel from November to January, after which they declined
during the remainder of the 1937-38 marketing year, partly as a result
of favorable prospects. for the 1935 crop, a.nd partly as a result of
the continued unfavorable milling ,nd feeding -'omand. In vicw of the
fact that the 1938-39 rye supply '.Yill be more than 10 percent larger
than last year, prices may be cxpocted to remain considerably below
those of a ycar ago, at least during the first half of the present
marketing year.

The reduction in the prospective 1938 rye crop during Juno,
together with some improvement in business conditions have been price
supporting factors and rye has mado little net decline since early
June It now seems probable that any further declines will be only
moderate and that the avcraGC price of rye for the present marketing year
may not be much different from. average or about 50 cents per bushel
in the same period in 1935,




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